NZ Called to Match Australian Tax Cut
August 15, 2012 New Zealand Taxation
New Zealand has been urged to lower its corporate tax rate to 25 percent, if Australia goes ahead with its proposed tax cuts.
Over the course of the week calls have been raised in New Zealand to consider cutting the corporate tax rate in order to match a recent proposal in Australia to reduce taxation on businesses.
On August 13th the Business Tax Working Group released a new consultation paper outlining potential changes which would need to be taken in order for Australia to cut its corporate tax rate from 30 percent to 25 percent.
Soon after the paper was released, calls were raised in New Zealand to lower the tax rate to 25 percent from the current level of 28 percent. Explaining the need to reduce the corporate tax rate the tax partner at PricewaterhouseCoopers Geoff Nightingale said that New Zealand has a lower tax rate than Australia, helping the country attract more investors looking to put money into the Australasia region, and “…if Australia were to lower their corporate tax rate as low as 25 percent that would tip the balance at the margin in their favour.”
Commenting on the possibility of tax cuts for New Zealand, the Finance Minister of New Zealand Bill English said that tax reduction were a possibility, but the government would not pursue any action that could jeopardize its own target of reaching a budget surplus by the year 2015.
Photo by tkw954