Effective tax rates imposed on the incomes of New Zealand residents

Leading tax consultancy OliverShaw commissioned Sapere to prepare a report on the effective rates of tax imposed on the incomes of New Zealand residents. We use statistical data to identify groups of taxpayers and welfare beneficiaries with levels and types of wealth and economic income that are reasonably “illustrative” of the general population of taxpayers and welfare recipients. We calculate the tax applying to those types and levels of wealth and income to produce effective tax rates. This approach is consistent with international effective tax rate studies. The key findings of the report are that the wealthy pay most of the tax collected in New Zealand and the wealthier a person is, the more tax they are likely to pay. We also found that average effective tax rates increase as the net real economic incomes of households increase.