The Government's Tax Working Group (TWG) has released its initial recommendations on how the tax system could be changed.
Key recommendations include changes to how capital income is taxed and heftier environmental taxes.
Finance Minister Grant Robertson says the TWG is making suggestions about how to increase fairness and balance in the tax system, because some New Zealanders are not paying their fair share of tax.
"All of the people who go to work every day in New Zealand and pay taxes on their wages and their salaries look at somebody who isn't paying tax on income that they get from another source, and they wonder why. It's a fair question."
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It has advised against changes to GST and progressive company taxation, and suggested the Government curb any further tax increases on tobacco and instead focus on positive measures to stop people smoking.
The group was barred from considering any capital gains tax on the family home or land under it, or increasing income tax. It has advised against new wealth, gift, inheritance and land taxes.
Capital income is the return on invested capital like interest dividends, rental income, gains after selling assets and the return on capital invested in a business.
Taxes applying to capital gain could take two forms, the first would apply to the gain from the sale of assets at the marginal income tax rate. If introduced, it would not be applied retrospectively.
The second option involves subjecting income from assets such as rental property to annual tax. Tax wouldn't be applied when the asset was sold, because it'd be paid each year based on the quity of the property.
"By international standards we have a narrow range of capital income which is taxed," said chair Sir Michael Cullen.
He said internationally where these taxes have been applied there is "no clear evidence of significant rent increase at all" as landlord groups have claimed, calling it a "scare tactic".
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"Most New Zealanders actually aren't in a position where they get income from anything other than their wages and salaries," Mr Robertson said.
The TWG also looked at environmental issues including greenhouse gases, biodiversity, water resources, solid waste and transport.
It considered how tax could help to curb New Zealand's high per capita emissions, the threats to native species and increasing landfill. It looked at how the country can manage its water resources, and combat the environmental and economic costs of transport congestion.
New Zealand rates low in the OECD on revenue generated by environmental taxes, the group found.
Short-term measures could include expanding the waste disposal levy, strengthening the Emissions Trading Scheme and increasing congestion charging.
Any changes to environmental taxation should consider Māori rights and interests, whether taxes would be localised and the impacts on industry.
The group recommended new measures to reduce hidden transaction like undeclared or cash-in-hand transactions to protect the integrity of the tax system.
National Party finance spokesperson Amy Adams said the interim reports makes it clear "that a capital gains tax is still coming to New Zealand mums and dads and to New Zealand small business.
"That is not going to help our businesses be internationally competitive and grow...it's going to be a disincentive on New Zealanders working hard, building up a bit of a nest egg, savings and investing."
Ms Adams said it was positive to see that changes to GST, land and wealth taxes were ruled out.
"This is an opportunity for the Government to take more tax from New Zealanders and that's just not warranted."
The group will take public submissions until November, and will provide its final recommendations to the Government in February 2019.
Any recommendations adopted by the Government would not be implemented until April 2021 – after the election.