Sharechat Logo

Finance Minister Joyce says more work needed on personal tax rates

Thursday 15th June 2017

Text too small?

Finance Minister Steven Joyce still has income tax in his sights where he sees more room to move on marginal rates but hasn't put a priority on company taxation which the Organisation for Economic Cooperation and Development says is an area where potential gains could be made in encouraging business investment.

The OECD's two-year survey of New Zealand's economy and policy settings was released today, with a focus on lifting the country's productivity and preparing for growing use of automation and artificial intelligence in the labour market. Among its policy prescriptions was encouraging the government to cut the 28 percent corporate tax rate to reduce the cost of capital and spur business investment.

At a briefing in Wellington, Joyce said the Crown's current forecasts don't give it room to move on tax for the next year or so because major infrastructure spending will mop up any spare fiscal capacity, and any move that is made would be on income tax.

"I'm worried that potentially lower income New Zealanders would be worried about what entitlements and transfers they lose by taking on a new job and by moving to a higher paying job – I think we've got some room to move in the space," he said.

By contrast, company tax was more like a withholding tax for New Zealand shareholders because of imputation credits, and unlike other jurisdictions, the corporate rate was more relevant to international investors, Joyce said. With the work on base erosion and profit sharing going on at the OECD, Joyce said as those changes bed in "I'd like to look overall at our company tax structure, but it certainly hasn't been a priority."

Government data today showed business investment climbed 3.7 percent in the year ended March 31 and is up 37 percent since March 2010, just before the government announced plans to cut the then 30 percent corporate tax rate.

(BusinessDesk)

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar sags after avalanche of data and central bank action
Fonterra board starts planning chair succession
Fulton Hogan keeps Australian civil construction unit
Time for congestion pricing has come - NZIER
Colliers defends KiwiBuild as 'far from a colossal failure'
Pushpay shares rise as cost-cutting upgrades earnings guidance
20th September 2019 Morning Report
NZ dollar weaker against British pound on EC president's Brexit optimism
Todd plans Kapuni drilling campaign
MARKET CLOSE: NZ shares gain; appetite for KFC helps Restaurant Brands hit record

IRG See IRG research reports