The NZ Herald writes utter rubbish on tax avoidance, defames wealthy folks (and is wrong legally)
If ever a writer tried to submit an article to the Herald characterizing someone as a criminal just since they were on a low income, it would be summarily rejected. Yet that is what the paper has done, except to people on high incomes. Its senior writer, Mr Wilson, argued the desire of such folks to avoid taxes made them the equivalent of "ram-raiders".
The paper headed his article: Tax Avoidance Is the Ram Raiding-of-the-uber-rich
The Herald misled 2 million Kiwis who click on its website each week about the nature of the Inland Revenue report about the tax affairs of wealthy Kiwi families, which was released by Revenue Minister David Parker .
David came to speak to my University class a couple of weeks ago about that report, so I know a bit about it. The report found no evidence, none at all, of "tax avoidance".
Making a false allegation about a person and then using it to characterize them as a criminal is beyond belief. The wealthiest families in this country are investors. They hold diversified portfolios as anyone who has built up capital should (which includes most NZ'ers who have shares in their KiwiSaver accounts). They hold shares in private & public companies & own land. The fact they hold such portfolios does not imply tax avoidance - the fact many hold large shareholdings in a family company does not imply they are fiddling their taxes.
The entire point of the IRD report was simply to point out something we already knew - namely that gains made on capital investments are taxed at a lower rate than the income tax.
I am no lawyer, but if you read the IRD's 2023 release on "Tax Avoidance" below, it refers to an Act of Parliament that gives a definition of that term. My understanding is that running a large family business is not defined as a "tax avoidance arrangement", since it comes under “commercial or private purposes” which includes "ordinary business or family dealings" and, as such, is designated as being run for "non tax avoidance" purposes.
Characterizing someone running a family business as a criminal, just because, by law, any capital appreciation of that business is taxed at a lower rate than income is outrageous.
The Herald made a terrible accusation that the Attorney General never for one moment ever made against those families - namely that they are engaged in tax avoidance arrangements. There is a link below to the IRD report - I can find not one single reference to "tax avoidance" in its entire 145 pages.