The highs and lows of a string of pandemic lockdowns have helped New Zealand taxpayers reach tax freedom day a couple of days earlier than last year.
File image. Photo: RNZ / Richard Tindiller
Today is Tax Freedom Day - a hypothetical day when New Zealanders have paid their full annual tax bill and get to keep every dollar for themselves for the rest of the year.
The day arrived two days earlier than last year, but two days later than in 2019.
The calculations made by business accountancy firm Baker Tilly Staples Rodway revealed some insights into pandemic behaviour, as well as the economic volatility that roiled markets and disrupted workplaces.
Baker Tilly Staples Rodway tax director Mike Rudd said petrol taxes collected in October were up nearly 50 percent on the year before, with a similar increase in January.
Alcohol tax was up around about one-fifth from August to December - even when Auckland venues and bottle stores were closed for a month, Rudd said.
However, tobacco tax was down a third for the entire year.
The corporate tax take was also erratic, with some firms grossly underestimating their earnings in the early days of the pandemic and having to play catch-up later in the year, Rudd said.
Tax Freedom Day dates would likely come later in the future, as much of the economic support the government had provided came from borrowed money and sooner or later would need to be paid back, he said.
"This is likely to mean increased taxation, like the recent introduction of a 39 percent top tax rate and extension to the bright line test, and reducing what can be deducted from income, such as the removal of interest tax deductibility from residential rental property income."
Another emerging issue was tax brackets failing to move with the rising cost of living, he said.