Wednesday 4th February 2009 |
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The changes, effective from April 1, include a temporary reduction to provisional tax payments, a reduction in the penalty rates for under-payments, raising the threshold for monthly PAYE and FBT returns, and increasing the amount a business can turnover before it has to register for GST.
"In these tough times, I want small businesses to be focusing on the road to jobs and growth, not on the taxman's forms," Key said in a speech to the Waitakere Enterprise Business Club.
The International Monetary Fund is forecasting the weakest global economic growth since WWII, with biggest economies - the US, Japan and the European Union, lining up for the first synchronized recession since that war. The global slump has already spurred the central bank to slash the official cash rate to the lowest since the OCR was introduced a decade ago as the Treasury predicts New Zealand has entered its fifth quarter of contraction.
Among the changes, the government will:
For exporters, the government is expanding the powers of the Export Credit Office, allowing it to provide short-term credit insurance on export contracts with payment terms of less than 360 days. The guarantee will be available for a period up to 2 ½ years. Difficulty obtaining short-term credit had forced some companies to turn down export orders in recent weeks, Key said.
The jurisdiction of the Disputes Tribunal will be increased to claims of $15,000, or $20,000 where both parties agree, from $7,500 and $12,000 currently, helping reduce the number of small claims that escalate to the District Court.
Key also said business advice services for small and medium-sized firms will be beefed up and government departments ordered to pay their own bills promptly to ensure companies are starved of cash flow.
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