A statement from a United Nations committee calling for countries to check tax is being applied proportionally to the wealthiest individuals, and questioning the fairness of GST, should prompt scrutiny of New Zealand's tax settings, commentators say.
The committee for economic, social and cultural rights said it wanted to emphasise the need to ensure tax policies promoted equality and non-discrimination and the mobilisation of resources for better economic, social and cultural rights outcomes.
It said regressive and ineffective tax policies could disproportionately affect low-income households, women and disadvantaged groups.
"One such example is a tax policy that maintains low personal and corporate income taxes without adequately addressing high income inequalities.
"In addition, consumption taxes, such as value added tax [GST in New Zealand], can have adverse impacts on disadvantaged groups such as low-income families and single-parent households, which typically spend a higher percentage of their income on everyday goods and services. In this context, the committee has called upon States Parties to design and implement tax policies that are effective, adequate, progressive and socially just."
It said there should be comprehensive assessments made of existing and proposed tax policies on economic, social, and cultural rights.
That should include the ratio of tax to GDP, revenue from individual and corporate income tax and from consumption tax, and the overall impact and tax burden on different income groups, women and disadvantaged groups.
It said countries could consider measures such as ensuring the wealthier and highest income were subject to a proportional and appropriate tax burden, focus on more direct income taxation rather than taxes such as GST, and adequately tax large companies, particularly multinationals.
"In addition, a holistic review of the tax system is essential to ensure that the combined effect of these measures advances economic, social and cultural rights while reducing inequality. Collectively, these measures could help States Parties to expand their tax base and strengthen the redistributive effect of their national tax systems."
Thalia Kehoe Rowden, executive director at the Human Rights Measurement Initiative, said the organisation produced scores that showed how governments in New Zealand and around the world had been performing in terms of respecting human rights.
She said tax policy was likely to be a driver for New Zealand's low scores.
"One thing the committee emphasises is if countries use regressive consumer taxes like GST they will impact more on people with low or no income ... The committee cautions against using them."
She said "huge" change was needed.
Allan Bullot, a partner at Deloitte, said whether GST was regressive depending on whether it was looked at as a ratio to income or spending.
"There's an element of regressiveness in GST but when Inland Revenue looked at it in relation to expenditure it was broadly proportional or slightly regressive."
Lower-income people were more likely to pay rent, which did not have GST, rather than purchase a new home, which would include GST, for example, he said.
He said GST was very effective as a tool for the government to raise a large amount of money relatively easily.
"It's not perfect but if you tried to make changes to have social policies guiding it you run a huge risk of jeopardising the collection of a significant amount of government revenue."
He said there were few countries that had moved away from a VAT or GST.
He said taxes designed to change behaviour - such as alcohol and tobacco taxes, or sugar taxes, could be very regressive, as the UN statement pointed out.
"You do get to the point while trying to change behaviour that you're taxing a very significant amount of a person's income. There are points that need to be worked through."
Green Party co-leader Chlöe Swarbrick said it was not the first time these concerns had been raised.
A study in 2023 that looked into the tax rate paid by 311 of the wealthiest New Zealanders found they paid a median effective tax rate of 9.4 percent.
Treasury said an average person was paying 20.2 percent.
When they paid tax, the wealthiest people paid a rate of about 30 percent, but they had more sources that were not taxed.
"The more massively insightful outcome of that research was to demonstrate that didn't just happen, it's pretty much a direct consequence of tax and economic settings. Those at the top pay an effective tax rate half that of the average New Zealander. It's not the first time this sort of thing has been called out by international institutions."
She pointed to the IMF statement that New Zealand could consider a capital gains tax.
"This is not some soft and fluffy report about how we ensure our human rights are met. It's necessary for civil society and democracies to function."
A spokesperson for Revenue Minister Simon Watts did not want to comment.
