Simple taxes are better

When GST was set up in New Zealand it was deliberately kept simple for very good reasons.

Simple taxes are easier to comply with, more difficult to avoid or evade and less expensive to administer.

The problems which can occur when you start making exceptions are clearly seen in Britain where pasties straight from the oven or cooling naturally will be exempt from a Budget VAT increase but those kept warm will still incur the extra 50p.

It must be all very confusing for those selling food and their customers but Lizzie Fournier from City FM has come up with a chart to help them:

If you click on it you’ll get a more legible version.

Labour here has sensibly back-tracked on its election policy to take GST of fresh fruit and vegetables. Let the mess in Britain be a lesson to them any others who want to tinker with GST.

I’m loath to call any tax good, but simple ones are definitely better.

Hat Tip: Taxpayers’ Alliance.

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