Monthly Archives April 2012

Reserve Bank Maintains 2.5% OCR

April 26, 2012 New Zealand Taxation

New Zealand OCRDue to the country’s positive economic performance and acceptable levels of inflation, the Official Cash Rate in New Zealand will not be changed this month.

On April 26th the governor of the Reserve Bank of New Zealand Allan Bollard announced the results of the latest review of the Official Cash Rate (OCR), saying that the Bank has not found enough economic evidence to justify changing the rate, and the rate will be maintained at the level of 2.5 percent. The OCR has not been altered throughout the nine reviews already held since the rate was dropped to 2.5 percent in March 10th 2011.

Explaining the decision, Allan Bollard said that the Reserve Bank deems the current level of inflation in New Zealand to be economically acceptable and the growth of inflation is still within the Bank’s own t...

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Health Ministry Debates Massive Hike on Tobacco Tax

April 25, 2012 New Zealand Taxation

Cigarette Tax Hike ProposedThe Ministry of Health is mulling the feasibility of further increasing taxes on tobacco products, which will raise the shelf price of cigarettes by more than 5 times.

On April 23rd the Ministry of Health presented a working paper regarding taxation of cigarettes, in which the Ministry suggested that the government could increase the taxes on tobacco products to hike the price of cigarettes to NZD 60 by the end of next year, and instate a further 10 percent increase each year. If implemented, the move would see an average pack of cigarettes cost upwards of NZD 100 by the end of 2020.

According to the Ministry, such a large hike in taxes would make a significant positive contribution to the government’s own goal of eliminating the occurrence of smoking in the country by 2025.

The Prime Mi...

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Government Eyes GST Changes

April 24, 2012 New Zealand Taxation

Peter Dunne Announces GST ChangeThe government is looking at overhauling the GST system to remove barriers for foreign businesses wanting to work in New Zealand.

In a media statement released on April 23rd the Minister of Revenue Peter Dunne announced that the government will be looking at amending the GST system to allow foreign businesses to make claims for a refund for purchases they make from local businesses.

Under current regulations, foreign entities which do business in New Zealand are not able to claim GST refunds like a New Zealand company. Commenting on the rules, the Minister said that “…our GST system is a hurdle for non-resident companies looking to do business with New Zealand businesses...

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Labour Calls for R&D Tax Credits

April 18, 2012 New Zealand Taxation

Labour Calls for R&D Tax CreditsNew Zealand needs to concentrate on building a stronger scientific sector and encouraging the development of more high-tech research jobs, in order to foster sustainable economic growth in the future.

In a speech given at a conference of the New Zealand Association of Scientist on April 16th the leader of the Labour Party David Shearer confirmed his party’s stance towards science in New Zealand, saying that the country needs to foster more technological research through the use of targeted tax breaks and economic policies.

According to the Labour leader, the National government has “systematically made choices that I [David Shearer] believe have set science backwards...

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