Kiwi Saver Comment01
(posted 25/08/2006)
Tax changes to KiwiSaver alarming say accountants
Finance Minister Michael Cullen is being accused of setting an alarming precedent by giving a special concession to the KiwiSaver scheme. Voluntary employer contributions to the scheme will be exempt from superannuation withholding tax, although the total exempted amount will be capped.
The Institute of Chartered Accountants claims Dr Cullen is playing favourites with his pet scheme. Tax Director Craig Macalister believes the Government should either give tax breaks to all savings schemes, or none. He predicts the tax exemption will inevitably create pressure for savers to pull out of their existing schemes to get the tax benefit. He says they may do that without looking at other factors, such as the five year lock-in rule that some other schemes do not have.
Other changes to the KiwiSaver scheme include the provision for people to divert half their personal contribution towards mortgage payments.
Source: newstalkzb
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