New Zealand is not collecting enough tax – which is widening the income gap between rich and poor, a new report says.

Source: 1 NEWS

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Oxfam have just released their inequality index, ranking 152 countries on their social spending, labour policies and how progressive their tax system is.

On tax, New Zealand ranks in the bottom third - 115 out of 152 – and just one place above Nigeria. The report says there is 85 per cent more the Government could be doing to collect taxes.

The charity says this indicator shows whether countries are collecting as much tax as they should - which is vital to countries being able to spend sufficient funds to reduce inequality.

And it measures the extent to which governments redistribute wealth across society through taxes on the wealthiest individuals and companies.

Overall New Zealand is ranked 30th out of 152 countries in commitment to reduce inequality – but 27th out of 35 developed countries.

Sweden, Belgium and Demark top the index – with Nigeria, Bahrain and Myanmar at the bottom. Many poor countries outperform wealthier countries. One in four of the top 50 countries are low or middle income countries – such as Namibia.

Deepak Xavier, head of Oxfam's Even It Up Campaign, said: "Extreme and growing inequality is undermining our economies, slowing the fight against poverty, and fracturing our societies, yet no country is doing enough to close the gap between rich and poor".