The Government has ruled out introducing a capital gains tax (CGT).
Prime Minister Jacinda Ardern said the coalition Government - made up of Labour, New Zealand First and the Greens - could not reach a consensus.
"All parties in the Government entered into this debate with different perspectives and, after significant discussion, we have ultimately been unable to find a consensus," she said on Wednesday.
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Ardern said while she still believes there are inequalities in the tax system and that a CGT could have helped resolve it, the Government was "unable to build a mandate for a capital gains tax".
"While I have believed in a CGT, it's clear many New Zealanders do not. That is why I am also ruling out a capital gains tax under my leadership in the future."
She said the Tax Working Group was a "valuable exercise that has delivered some useful suggestions well beyond just the debate on CGT", adding that she wanted to "thank the group for its work".
"There are other things that can be done to improve the fairness of our tax system. As such the Coalition Government has agreed to tighten rules around land speculation and work on ways to counter land banking."
Ardern said the Government will continue to cut red tape for business and "crack down on multi-nationals avoiding paying their fair share of tax" in New Zealand.
"We have already made changes to address base erosion and profit shifting, and we will shortly release a discussion document on options for introducing a digital services tax."
The Government is now addressing long-term challenges, Ardern said, such as mental health, climate change and child poverty; and responding to the March 15 terrorist attack.
"Those challenges will be my priorities for the remainder of this term."
Finance Minister's response
Finance Minister Grant Robertson said while the Government has ruled out a CGT, a number of the recommendations will now be considered for inclusion in the Government's Tax Policy Work Programme.
"That includes exploring options for targeting land speculation and land banking," he said. "We intend to direct the Productivity Commission to include vacant land taxes within its inquiry into local government funding and financing."
He said the Government will not introduce resource rentals for water or a fertiliser tax in the current term of Parliament.
Other priorities for the Government this year will include progressing legislation for research and development tax incentives and GST on low-value goods from offshore suppliers.
It will also focus on discussions around a digital services tax, and further work to ensure multinationals pay their fair share of tax.
Newshub.
