Government Seeks Feedback on Bond Tax
Peter Dunne has announced the publication of a paper seeking feedback on taxation of New Zealand’s bond market.
In an effort to foster the growth of New Zealand’s domestic bond market, Peter Dunne, New Zealand Revenue Minister, has announced the publication of “AIL, NRWT and the bond market”. Primarily, the paper is concerned with the idea of lowering the Approved Issuer Levy on bonds to 0% when pre-determined circumstances are met.
It is suggested by the paper that dispensing with AIL, which according to the publication also can serve as a proxy for Non-Resident Withholding Tax (NWRT), could create a marginal advantage for the domestic bond market by easing the financial burden of issuing to non-residents. Tests would need to be created to determine whether a given financing instrument was a loan or a genuine bond. It has already been determined by the paper that those bonds listed on a stock exchange would automatically qualify.
According to Peter Dunne “New Zealand’s corporate bond market is a very small but growing part of our financial system, with corporate bonds on issue having risen in value from $12 billion to $23 billion since 2005.” He went on further to say “Well developed domestic capital markets have an important role to play in economic growth.”