The minister of Revenue’s party, United Future, has been silent.
National finance spokesman John Key predictably calls the plans to tax offshore shares more harshly a capital gains tax which is “unfair”.
Key alleges Finance Minister Michael Cullen has a pattern when he does tax reform. Firstly some relief is given but this is immediately offset by increased taxes in another area.
Key says the cap on tax on offshore investments ex Australia isn’t necessarily capped.
“Kiwi investors shouldn't be fooled by the 5% cap either. This only applies until they sell the shares and repatriate the money to New Zealand. Then the outstanding capital gains still owing will have to be paid – at the person’s marginal tax rate.
Summing up the changes he says: “It is an unfair plan put in place for no good reason at all.”
Cullen’s response was to roll out some of the accolades from other people like the NZX and Ernst and Young and to get personal.
"The changes might not suit the sophisticated investor mates of John Key, but we believe we have got the balance right. This is a much fairer system which means tens of thousands of ordinary New Zealand investors saving through managed funds will no longer be disadvantaged," Cullen said.
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