Paul Jamieson

I would like to respond to D Dawson's claim that "we have Māori corporates and businesses paying only 17.5 percent income tax".

The reason I would like to respond is that this is quite a common argument bandied about when discussing the "privilege" that Māori enjoy in Aotearoa.

For all those who may agree with this statement, please know that it is factually inaccurate.

I would point readers to the taxworkinggroup.govt.nz website, Background Paper for Session 6 where the 17.5 percent rate and the role of Māori Authorities are discussed.

For those who do not take enjoyment from reading tax policy discussions, let me summarise: A Māori Authority is entitled to use 17.5 percent rate under existing tax law.  A Māori Authority is an intermediate entity, meaning that all income and tax credits are passed on to its members (akin to shareholder dividends and our imputation credit regime).

The 17.5 percent rate is in place for a very good reason: the vast majority of members of Māori Authorities (i.e. Māori taxpayers) earn below the (now old) $48,000 income threshold.

So, having a 17.5 percent rate means that these taxpayers do not have to claim back overpaid tax from IRD (which they would have to do if the Māori Authority was taxed at the standard 28 percent corporate rate). So, it reduces compliance costs and economises Government activity, which our beloved conservative friends love.

So, the real questions to answer here are:

1. Why is there such a widespread dislike for an efficient Government policy? (hint, it has something to do with racism); and

2. If Māori enjoy so much "privilege", why are the majority of Māori taxpayers earning such low incomes?