Wellington-based Trade Me founder and philanthropist Sam Morgan, who says the tax system is set up so the wealthy such as himself do not pay tax, is welcome to send a cheque to the Inland Revenue Department if he wishes, the Finance Minister says.
Wellington-based Trade Me founder and philanthropist Sam Morgan, who says the tax system is set up so the wealthy such as himself do not pay tax, is welcome to send a cheque to the Inland Revenue Department if he wishes, the Finance Minister says.
The entrepreneur, who founded Trade Me in 1999 and sold it in 2006 to Australian publisher Fairfax for over $700 million, said he paid basically no tax.
"And that's not right, but what am I supposed to do?"
Mr Morgan, 32, was estimated to have made at least $227m from the sale of his business but had not had to pay a capital gains tax. As he had no effective income, he paid minimal tax.
The people who paid the most tax were workers, he said.
Finance Minister Bill English said the Government would welcome a contribution from Mr Morgan if he was feeling uneasy about the tax laws.
"He could look to just write out a cheque to IRD, they won't send it back, they'll bank it," Mr English told reporters today.
While Mr Morgan probably did earn some income and pay some tax, the Government needed to make the system fairer so people were paying their fair share of tax, particularly if they had invested in property, he said.
But the idea of a capital gains tax was off the table.
"We had a pretty hard look at a capital gains tax, and decided that it was just too complex and didn't raise enough revenue."
However, the Green Party called for a comprehensive capital gains tax with an exclusion for owner-occupied housing, as Treasury and IRD had estimated that an extra $4.5 billion could be raised.
"It's not fair to expect income-earning New Zealanders to carry a disproportionate share of the tax burden while some of New Zealand's wealthiest individuals pay none," said Green Party co-leader Russel Norman.
"Nearly every other country in the OECD has a capital gains tax. Australia has one. America has one. It's time we closed the loopholes and encourage productive investment rather than tax avoidance behaviour."
