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Tax Freedom Day comes earlier than in 2020

Tax Freedom Day comes earlier than in 2020 © RNZ / Richard Tindiller The highs and lows of a string of pandemic lockdowns have helped New Zealand taxpayers reach tax freedom day a couple of days earlier than last year. Today is Tax Freedom Day - a hypothetical day when New Zealanders have paid their full annual tax bill and get to keep every dollar for themselves for the rest of the year. The day arrived two days earlier than last year, but two days later than in 2019. The calculations made by business accountancy firm Baker Tilly Staples Rodway revealed some insights into pandemic behaviour, as well as the economic volatility that roiled markets and disrupted workplaces.

Bracket creep key to addressing unfairness in tax system

OPINION: Mention the word “tax” to most people and they’ll tell you it’s boring. Then mention individual changes to the system that affect landlords, like interest tax deductibility on residential rentals and the bright line test. Or the idea of shifting our income tax bands to stop Kiwis on “average” incomes slipping into the next bracket up. Suddenly everyone’s talking at once. Because the truth is, tax affects every one of us – there’s a saying about it. Whether the government is spending it, collecting it, or we’re saving it, it has the power to make a huge difference to our lives. Tax policy matters.

Tax freedom day: From today, you re working for yourself

In April 2020, the corporate tax take was 83 per cent down year-on-year but by September provisional tax payments had increased to 41 per cent above the previous year’s. Alcohol tax was up a fifth from August to December and petrol tax was up nearly 50 per cent in October compared to a year earlier. In 2019, New Zealanders only had to work until May 9 to cover their total tax bill, and in 2017, it was May 8. Rudd said the increase in days over that period was largely due to bracket creep – the fact that wages had been increasing but the tax brackets had not.

Tax Freedom Day arrives earlier than usual

But Covid measures mean more tax on the way, according to Baker Tilly Staples Rodway. Even after the turmoil of the past 14 months, the so-called Tax Freedom Day for 2021 has arrived two days earlier than last year, but the early arrival of ‘freedom’ is   Choose your best value subscription option here. Already have an account? Login Related news

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