Hon Dr Michael Cullen
Minister of Finance
Hon Peter Dunne
Minister of Revenue
MEDIA STATEMENT
Finance Minister Michael Cullen and Revenue Minister Peter Dunne announced today that the Cabinet yesterday agreed to a new, bottom secondary tax rate of 12.5 per cent.
The decision flows from the major package of personal tax cuts announced in Budget 2008.
"Today's announcement ensures that those with second incomes do not have too much tax deducted from their pay packet," Dr Cullen said.
"Secondary tax rates are not intended to tax income earned from two or more jobs more heavily than the same income derived from a single job. Rather they seek to ensure taxpayers do not inadvertently end up with a tax bill at the end of the tax year." Hon Peter Dunne said.
It is important to note that introducing a new secondary rate is essentially about timing. Anyone working a second job who is concerned that they have been over-taxed, should contact Inland Revenue. The new rate comes into effect on 1 April 2010.
Note to editors
Reductions to the secondary tax codes are not actually tax cuts. Tax obligations remain the same, the decision to lower the secondary tax rates reduces the chances that a person will be over taxed of the course of the year. Where this occurs tax payers are, and will remain, entitled to a tax refund at the end of the tax year.
Contact:
Ted Sheehan 04 470 6985 or 021 638920
Chris Ritchie 04 471 9412