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Company tax has fallen AN IMPORTANT initiative in the government's on-going programme to strengthen the economy took effect last month when the company tax rate fell to 30 per cent."Reducing the company tax rate will allow successful businesses to re-invest a greater share of their profits in new technologies and in further building-up the skill base of employees," Finance Minister Michael Cullen said. "We expect that lowering of the company tax rate will serve to strengthen the competitiveness of New Zealand-based companies, and that is good for the long-term interests of all New Zealanders," Revenue Minister Peter Dunne said. The cut to the company tax rate to 30 per cent, from 33 per cent previously, is the first time the company tax rate has been reduced in New Zealand since 1988. Dr Cullen said that the latest initiative is part of the government's economic transformation package that includes the significant moves on depreciation and other business tax measures announced in 2005, tax credits for R&D and changes to the tax treatment of savings vehicles. The changes arise from the Business Tax Review carried out as part of the confidence and supply agreements between Labour and UnitedFuture and between Labour and New Zealand First. The government has so far cut taxes by around NZ$4.5 billion a year, with benefits targeted at businesses, families with children and personal savings. |
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