What’s the difference between a tax and a levy – and does it even matter?

The useful part

The government recently ruled out a 'bed tax', which raised the hackles of Auckland mayor Wayne Brown, who said the proposed revenue-gathering tool was actually a levy. In line with National's " no new taxes " campaign fixation, in late August Christopher Luxon ruled out implementing an accommodation levy if his party was re-elected. "Taxes are unavoidable but the bed night levy is avoided by simply not staying in paid accommodation," he wrote in the Herald.

How it works

• Tax specialist Terry Boucher says in the eyes of tax law, there isn't one: the Tax Administration Act 1994 defines a tax as meaning a tax, levy or duty of any type imposed by tax law, regardless of how the...
• While a tax is universal and applies to nearly everybody, like GST and income tax, a levy is more targeted and the revenue is ring-fenced.
• "What we call, in tax terms, <a href="https://dictionary.cambridge.org/dictionary/english/hypothecation#google_vignette...

Details worth keeping

Right, what's the difference between a tax and a levy?