Responding to reports that the National-led Government has decided to scrap its plans to reverse the previous Government’s app tax, Taxpayers’ Union Campaigns Manager, Connor Molloy, said:
“We don’t have a tax problem in New Zealand, we have a spending problem. The new Government is proving to be gun-shy about making much-needed spending cuts, instead choosing to keep ineffective and inefficient taxes that they campaigned so hard against to plug the fiscal gaps.
“The app tax creates a distortion whereby an Uber driver earning less than $60,000 a year will be forced to pay GST while a taxi driver doing the same won’t. This will hurt those who provide app-based services, especially those for whom it is only a part-time gig – such as parents, retirees or students – who will see their incomes drop as the Government drives consumers away from higher-priced app-based services.
“The u-turn will also punish those who rely on services like Uber to get around, including those with mobility issues or people who can’t rely on the bus network to get them to work on time. We can’t tax our way to prosperity; the new Government must focus on cutting spending and increasing productivity to balance the budget, not taxing hardworking New Zealanders even more in the middle of a cost-of-living crisis.”