Besides personal income tax, what are other common types of taxes? (e.g., Goods and Services Tax - GST)

Hello there! Seeing your question, I'd guess you're new to New Zealand or working on financial planning—great question! Besides the most familiar income tax (the part deducted from salaries), New Zealand does have quite a few other taxes. But don’t worry, most are tucked away in everyday spending and business activities. Once you understand them, they’re not so mysterious.

Let me break down the other taxes you might encounter beyond income tax and GST, keeping it simple and straightforward.

1. Goods and Services Tax (GST)

You already mentioned this, but it’s so important I’ll add a bit more.

• What is it? Think of it as a "consumption tax." In New Zealand, nearly everything you buy or service you use has this tax quietly included in the price.
• How is it applied? The rate is 15%. For example, that $5.50 coffee you buy? It already includes roughly $0.72 in GST. You don’t notice it at checkout because the business collects it and later submits it to Inland Revenue (IRD).
• In a nutshell: You’re effectively paying GST every time you spend money.

2. Corporate Income Tax

Similar to personal income tax, but this one applies to companies.

• What is it? Just as individuals pay tax on income, companies pay tax on their profits. A New Zealand-registered company must pay tax on its profit (revenue minus operating costs).
• What’s the rate? Currently 28%.
• What’s it to do with me? If you own a business, you’ll deal with this directly. If you're an employee, this is your employer’s headache—it has little to do with you personally.

3. Excise Duty / Excise Tax

This is a special tax applied only to specific "sensitive" goods.

• What is it? Mainly targets tobacco, alcohol, and fuel. Think of it as the government discouraging excessive consumption or using the revenue to offset social costs (like smoking-related healthcare or road maintenance).
• An example: That expensive pack of cigarettes or bottle of wine? A large chunk of the price is Excise Duty. Similarly, fuel excise is built into the price at the pump.
• In a nutshell: A "targeted" levy on specific goods like cigarettes, alcohol, and fuel.

4. Fringe Benefit Tax (FBT)

This one's particularly interesting and mainly a concern for employers.

• What is it? If a company provides employees with non-cash benefits beyond their salary – like a company car for personal use, gym memberships, or low-interest loans – these benefits are considered a form of income. The company must pay tax on the value of these benefits.
• Why does this exist? To ensure fairness. It prevents companies from helping employees avoid income tax by providing benefits instead of cash.
• What’s it to do with me? If your company provides such perks, you won't pay the FBT directly (your employer does). However, the cost of FBT affects how much the company is willing to spend on these benefits.

5. Resident Withholding Tax (RWT)

Ordinary people encounter this tax often, especially if they have savings or investments.

• What is it? Do you have a New Zealand bank account that earns interest? Before paying you that interest, the bank will "withhold" a portion and pay it directly to Inland Revenue. This withheld amount is RWT. Similarly, RWT might also be withheld from dividends paid on shares you own in NZ companies.
• How does it work? When you open a bank (or investment) account, you’re asked for your tax rate and IRD number. If you don’t provide this, or provide incorrect details, the bank uses the maximum rate.
• The good news: This is just withholding. At the end of the tax year, Inland Revenue reconciles it against your total income. If too much was withheld, you’ll get a refund.

6. Customs Duty

Important for anyone who likes shopping overseas!

• What is it? When you buy goods from another country and ship them into New Zealand, you may need to pay Customs Duty and GST if the value exceeds a certain threshold.
• An example: You buy a pair of limited-edition sneakers worth over NZ$1000 from a US website. When they arrive in New Zealand, you might need to pay Customs Duty and Import GST to clear your treasured possession through customs.

To sum it up:

For most ordinary people, the two taxes you’ll notice most in daily life are:

1. Income Tax: Deducted directly from your salary.
2. Goods and Services Tax (GST): Paid every time you buy something.

The other taxes – like company tax and FBT – are primarily for employers and businesses to handle. RWT is managed for you by your bank or investment provider. Excise Duty is already embedded in the price of things like cigarettes, alcohol, and fuel.

Hope this explanation gives you a clearer picture of New Zealand's tax system—does it feel less complicated now? If you have specific financial questions, like starting a business or investing, talking to a professional accountant is always the safest bet!