Monthly Archives November 2009

New Zealand Tax Reform Ideas Released

November 30, 2009 New Zealand FinanceNew Zealand Taxation

BeehiveThe 2025 Taskforce published its report to the New Zealand Government on November 30th, suggesting a number of taxation and government spending changes it believes are necessary in order for the country to close any incomes gaps with Australia.

Key suggestions brought forward by the 2025 Taskforce report include lowering the current top tax rate of 38% and the corporate tax rate of 30% to 20%. If suggestions in the report are followed, Government spending in 2012 and 2013 will be reduced to 29% of GDP, from its current estimated 37%. In an effort to materially reduce the Crown’s operating expenses, a medium-term target will be set and the Minister of Finance will be required to publicly report what steps are taken to achieve this goal...

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Family Tax Credit Raised and FBT Lowered

November 25, 2009 New Zealand Taxation

United Future AnnouncementChanges were announced on November 24th to both the New Zealand minimum family tax credit and fringe benefit tax (FBT) on low-interest employment related loans.

According to a statement by Peter Dunne, New Zealand Revenue Minister, low-income families who are eligible for minimum family tax credits, will see a small rise in their received amount on April 1st 2010. Explaining the change, Peter Dunne said “The minimum family tax credit provides a guaranteed minimum family income to families who are in work. It currently guarantees recipients a net income of $20,540 a year. This will rise to $20,800 from 1 April 2010”. The tax credit aims at making sure that eligible families are at a net gain from entering the workforce...

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Taxation Bill Receives Urgent Amendment

November 24, 2009 New Zealand Taxation

Mock Electric Train 16 December 2008A supplementary order paper was released on November 24th, with several proposed additions to the Taxation (Consequential Rate Alignment and Remedial Matters) Bill.

Peter Dunne, New Zealand Revenue Minister, announced the release of a supplement to the Taxation Bill, which is near its final stages of parliamentary approval. The first of the amendments involves GST on inbound tour packages, the second concerns non-resident withholding tax rate reductions, and the third involves superannuation portability. According to Peter Dunne, the remaining six changes are minor and remedial.

The first change clarifies that facilitation services for tour packages for overseas tourists will be levied with GST at the current rate of 12.5%...

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NZ Government Turns to Oil for Deficit Solution

November 19, 2009 International FinanceNew Zealand FinanceNew Zealand Taxation

In a speech made by Gerry Brownlee, New Zealand Energy Minister, on November 18th, it has been made clear that the New Zealand Government is actively setting its sights on the petroleum and gas industry to help fix its budget deficits.

Gerry Brownlee made comment about oil being New Zealand’s third largest export in 2008, netting NZ$2.8 billion. He also said that the industry is experiencing heavy expansion with exploration projects being carried out in numerous possible fields across New Zealand. If conservative estimates of the oil potential of the explored fields are recognized, the petroleum export sector could see an extra NZ$30 billion per annum by 2025...

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