Tax is a compulsory payment made by taxpayers to support thegovernment to fund the public services to its citizens. In New Zealand the Inland Revenue Department collects the tax on behalf of NZ government. NZ tax systems is based on marginal tax rate for individuals and fixed tax rates for companies and other entities. The Minister of Revenue has the power to suggest changes to the NZ tax system in Parliament and the Minister mainly manages the tax system.

The current tax rate for individual as follows:

   0 - 38,000 19.5%
   38,001 - 60,000 33%
   60,001 - above 39%

Company tax rate in New Zealand is currently 30%.

A good tax system should have the following characteristics:

   1. Should have an adequate and stable tax base
   2. Should be fair
   3. Should be efficient
   4. It should be transparent & visible
   5. It should be simple
   6. Should be used to advance social policy

NZ tax system is mainly based on the above principals. Having a good tax system in a country will facilitate the government to provide better public services to its citizens. New Zealand tax system mainly based on two pieces of legislations given below

1. Tax Administration Act 1994
2. Income Tax Act 2007

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James Pathmanathan