Tax review should count growth, but is about cost
Media statement Tuesday, July 25, 2006
Business tax review should count on growth, but its all about costs
The focus of Government's Discussion Paper on business tax wrongly counts the costs of encouraging investment in the growth of Kiwi businesses while skimping on information about the economic benefits that will result, the Employers & Manufacturers Association (Northern) says.
"We are disappointed the business tax review quantifies the cost to government revenues, but ignores the extra economic benefits and job prospects that will flow from it," said Bruce Goldsworthy, EMA's Manager of Advocacy.
"The Government is starting out on the wrong foot.
"The three per cent cut suggested for business tax rates is conservative in the extreme.
"A big question hangs over the cost estimated for the tax cut in the absence of any estimate of economic growth and the subsequent increase in tax revenues.
"Aligning our company tax rate again with Australia's should help stave off our trans Tasman rival's asset buying incursions here.
"The tax credits foreshadowed for exporting, skills development and R&D are welcome, especially given the size of our current account deficit."