Have your say: Is our tax system fair?

Inland Revenue said it believes the well-being of New Zealand may be lowered because scope exists for the "smart, the able and the well-advised" to avoid paying taxes, and that this can erode confidence that New Zealand's tax system is fair. In it's briefing to the incoming Minister of Revenue Peter Dunne (who held the same position in the last government), Inland Revenue said that there were some growing pressures on New Zealand's tax system. "One concern is the overall coherence of the tax system. To an increasing extent, the tax paid by an individual depends on the way in which that income is earned. There is ample evidence that people are using different entities to structure their affairs in ways which reduce their tax liabilities," the IRD said. "The scope that the current tax system provides for this to happen imposes costs that can lower the well-being of New Zealand as a whole. It can also create considerable business uncertainty around what is and what is not tax avoidance." "It can create a mentality that rather than tax being something which is paid by all, tax is something for the smart, the able and the well-advised to avoid. Over time, this can erode confidence that the tax system is fair." "(A) good tax system is characterised by high levels of voluntary compliance, which is helped by the tax system being perceived as broadly fair. That is more likely when the policy framework is clear. But it is also necessary to have good tax administration which makes it as easy as possible for those who wish to do so to get it right and as hard as possible for those who wish to do so to get it wrong." Previously on interest.co.nz we have argued that property investors have taken advantage of the tax system to avoid the 39 cent tax rate. Your views? Is New Zealand's tax system fair? Why? Why not? Comments below please