Tax change could alter investment behaviour
The Retirement Commissioner, Diane Maxwell, has suggested that savers should not be taxed on the portion of interest they earn that is at or below the level of inflation.
She yesterday issued the 2013 Review of Retirement Income discussion document.
In it, Maxwell said the age of super eligibility should be increase in line with life expectancy, indexing the pension to the average change in consumer prices and wages, automatic KiwiSaver enrolment and removing the tax on the inflation component on simple savings products.
She said that would reduce the disincentive to save. “The most common complaint is that the incentives provided by taxation divert disproportionate amounts of money away from desirable activities such as saving and investing in the sharemarket into areas such as housing, particularly rental housing.”
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