Over the 1960s and 1970s the share of the tax take derived from income tax rose. As people’s salaries increased they moved into higher tax brackets and paid higher rates of income tax. Salary increases did not always match the inflation rate, so in many cases people were worse off in real terms. A goods and services tax was introduced in 1986 and income tax rates were reduced. Still New Zealand remains high compared to the OECD average in terms of the proportion of tax that is gathered from personal income tax. Note that this OECD calculation of personal income tax does not include customs duties.
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