by Rob Hosking
And the author of the report on taxation of collective investments, Craig Stobo, is urging the industry to make its views known to officials in that small window of opportunity.
This is the best chance the industry has had, or is likely to have, to get its long standing tax problems sorted out, he told an Association of Superannuation Funds breakfast in Wellington yesterday.
“The hard bit between now and the Budget is sorting out the details,” he says.
And although there won't be the formal submissions process during that “hard bit” – which he says will end around February, by which time policy options start being closed up in the run up to the May Budget – there will be the opportunity for the industry to “re-engage” with Treasury and Inland Revenue Department officials.
“The minister has a clear interest in savings, he has a fiscal surplus, and he knows the current set-up is a crock. He knows the emperors clothes are well and truly off,” Stobo said.
Of the three recommendations in the Stobo report, abolition of the capital gains tax on active managed funds looks a certainty.
The other two - an “investment and savings tax (IST) using the risk free rate of return method for offshore investments, and a “look through” regime taxing individual investors at their marginal rate instead of taxing them within the investment vehicle – are still very much in Finance Minister Michael Cullen’s “maybe” file.
Stobo says his recommendations were a complete package and all three parts fit together. He says it is important that the report isn't "cherry picked".
There may be some indication of where the government is heading in the Budget Policy Statement, which will be released on December 14. However that is likely to be reasonably broad.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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