Eleven Changes to NZ Taxation Announced

February 4, 2009 New Zealand FinanceNew Zealand Taxation  No comments

The government of New Zealand has announced eleven changes to the tax system in their Jobs and Growth Plan.

Aimed primarily at improving the situation for small and medium businesses, the Jobs and Growth Plan is currently constructed out of eleven changes to the taxation system, along with four changes with the same aim but not in regards to tax.

The two main aspects of the new changes are a lowering of the tax underpayment interest rate to 9.73% (from 14.24%) and the removal of the mandatory 5% yearly increase on Provisional Tax estimates. Other changes include the GST registration threshold which is lifted to $60,000 and the GST payment threshold which is now $2 million.

Legal expenditure of less than $10,000 can now be fully deductible. The PAYE once-a-month filing and payment threshold is raised to $500,000, which is also the threshold for Fringe Benefit Tax filling.

Current estimates have placed the total cost of these changes at $480 million over the next four years. Initial reaction to these measures have been positive, although some commentators are already begging to call it a short measure, whether this is an accurate description or mere attempts at publicity is yet to be determined. Further reactions to the tax measures are expected to arise over coming days.

Additional information on the official site of New Zealand Government.