New Zealand's broad-based GST has often been suggested as a desirable model for a value added tax. This paper explains how New Zealand's GST works and discusses how its broad-based approach came about, why this has been acceptable in New Zealand when it has not been in many other countries, and outlines what we see as problem areas of the tax.
Since its introduction in 1985, GST has become an important component of New Zealand's tax system, accounting for roughly 25 % of total tax revenue. In March 1999 the New Zealand Government published a discussion document containing proposals for reform of the GST Act arising from a review of GST. This article outlines changes to the GST Act which have arisen from this review.
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