The Māori economy

Tax Working Group Interim Report

By Mark Lash

The Tax Working Group (TWG) has made a commitment to ensuring Māori perspectives are considered as part of its deliberations. In particular, emphasis is given to how Te Ao Māori perspectives can help inform the understanding and application of the Living Standards Framework. Concepts of manaakitanga (care and respect); kaitiakitanga (stewardship); whanaungatanga (the relationships/connections between us); and ōhanga (prosperity) should be considered as part of evaluating options by the TWG.

The Interim Report has given some consideration to the existing Māori Authority taxation regime. Broadly, this regime gives certain tax benefits to eligible entities; most notably a tax rate of 17.5%. This tax rate is lower than the standard company tax rate of 28% in recognition of the marginal tax rate likely to be applying to the economic owners of the Māori Authority. The TWG has reviewed statistics and concluded that the 17.5% rate remains the most appropriate rate.

Beyond the rate, the TWG has recommended that more entities should qualify for this tax rate. In particular, subsidiaries of Māori Authorities should also be able to access this rate. This is currently possible if transparent structures such as limited partnerships are used. We welcome this as a very sensible proposal which will reduce compliance costs and simplify business structures. 

Māori economy recommendations:

  • Retain the 17.5% tax rate for Māori Authorities
  • Extend the 17.5% tax rate to the subsidiaries of Māori Authorities
  • Consider technical refinements to the Māori Authority rules, as suggested by submitters, as part of the Tax Policy Work Programme. This includes having a default resident withholding tax rate on Māori Authority distributions of 17.5% instead of the current 33%
  • The TWG will spend time considering the potential impact of any taxation of capital on Māori freehold land and assets held by post settlement governance entities



Find out more

Tax Working Group Interim Report

Deloitte's perspectives
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