Which New Zealand tax, introduced in 1986, is a broad consumption tax charged at multiple stages of production?
Answer
Goods and Services Tax
New Zealand’s broad 1986 consumption tax charged at multiple production stages is the Goods and Services Tax.
New Zealand introduced GST on October 1, 1986, as part of the economic reforms associated with Finance Minister Roger Douglas. The tax replaced several narrower indirect taxes and was designed to apply broadly to goods and services rather than concentrating revenue on selected products.
GST uses an input-tax credit system. Businesses charge GST on taxable supplies and generally claim credits for GST paid on business inputs, leaving the final burden with the consumer. New Zealand is known for its broad base, although some financial services and other categories receive special treatment.