NZ: Let's make GST lower and easier to compute !

 

(Originally posted 14 September 2026)

 

New Zealand politics:

 

GST is 15% in New Zealand and there's quite a bit of admin to it !

 

Let's make GST lower and easier to compute !

 

At the moment it is Sales less Inputs and the difference between the two is where we find the GST.

 

Instead, let's make it 5% (Five percent) and Calculated on Sales only with NO Inputs used !

 

Example under the existing 15% regime: Goods sold for $215, less Inputs of $100, the GST portion on $115 for IRD is $15.00.

 

Example under the NEW 5% regime: Goods sold for $215, Inputs not used in this calculation, and so the GST portion for IRD will be $10.24.

 

Changes for Banks & Landlords: GST would be extended to 5% on Mortgage Repayments (paid as part of the Bank's gross income, not added to the Mortgagor's repayments) and 5% on Rents (if you are renting or leasing from a Landlord, paid from the Landlords gross income, not added on).

 

GST is called Good & Services Tax, but it should be called Government Sales Tax and its focus should be on the Sales (the Income) the entity is making and not distracted by the Inputs to make that sale.

 

GST should also be split 50/50 between Central Govt and Local Govt, that means when a Local only company pays $100 in GST, $50 is sent to its Local Council that can then be used to offset things like debt and local infrastructure upgrades. If a business is Nationwide, you'll be able to login into IRD and set where your Branch networks are located and the split will be evenly made between the Councils where your Branches are located.

 

The bigger picture of Local Councils getting a better share of GST is that your rates overall should start dropping over the longer term.

 

PAYE is taxed on Gross, so there's also no reason why Company tax should also be taxed at a lower rate on the Gross sum - and not the difference after Gross less Inputs.

 

Grant Seton 

 

ENDS