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Budget 2024 | The Government has confirmed changes to personal income tax, the independent earner tax credit, in-work tax credit, and the minimum family tax credit. Find out more: Personal income tax threshold changes

Since 2021 we have carried out research to find out more about how much tax is paid by New Zealand’s high-wealth individuals relative to their economic income, a concept of income that is broader than taxable income.

To undertake this research we used tax administration data, data from public sources and collected information from the individuals involved in the research.

The data has been analysed and a link to the final report and associated documents is available here:

Report

High-wealth individuals research project

Factsheet

Tax and the economic income of the wealthy

Approach

Operational process summary

Project purpose

The high-wealth individuals research project looks at how much tax is paid by high-net-worth families in New Zealand. We calculate their effective tax rates – that is the tax they pay relative to their income - using an economic measure of income. There are 311 families covered by the analysis.

Similar to research undertaken using the Household Economic Survey, our analysis is based on the family unit, which includes partners and dependent children. The project also incorporates the income, and tax paid, of companies and trusts associated with the family units

The findings of the research will help assess the progressivity and efficiency of the New Zealand tax system and will allow us to provide more robust advice on future tax policy. The project does not seek to make policy recommendations but may feed into future policy advice.

External Input

A Methodology Advisory Group of external experts from economics, statistics and tax disciplines were consulted as our methodology was developed. Report findings were subject to peer review by two academic peer reviewers.

Privacy

Results presented in the report have been aggregated to ensure the identity of individuals is protected. The privacy and security measures implemented during the project are outlined in the Privacy Impact Assessment.

The New Zealand Treasury report

The New Zealand Treasury have conducted a similar study on the effective tax rates paid across the full income and wealth distribution. Links to the New Zealand Treasury findings can be found here:

Tax and Transfer Progressivity in New Zealand: Part 1 Methodology (AN 23/02)

Tax and Transfer Progressivity in New Zealand: Part 2 Results (AN 23/03)

Estimating the Distribution of Wealth in New Zealand (WP 23/01)

Last updated: 21 Jun 2023
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