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Tax Cuts Must Go on Agenda

Tax Cuts Must Go on Agenda

Today’s announcement of a record fiscal surplus strengthens the case for reductions in personal and company tax rates according to Charles Finny, CEO of the Wellington Regional Chamber of Commerce.

“As part of its business tax review the government had already hinted at a reduction in the company tax rate. However a total package of tax reform which incorporates reductions in personal tax rates is what is needed and today’s figures show that this is affordable.

“Cutting the company tax rate alone was never an option. That would widen the differential between it and the top rate of personal tax - increasing the incentive for tax avoidance.

“More importantly, around 40% of businesses are unincorporated meaning the company tax rate is not relevant to a large proportion of New Zealand businesses.

“These facts combined with today’s announcement of a record surplus mean personal tax rates and thresholds must be put on the agenda.

“If we are to fully transform New Zealand’s economy or achieve the kind of productivity growth that both business and the Government seek, tax reductions are essential.

“Businesses appreciate the importance of fiscal responsibility. However, the size of the surplus shows that tax cuts are affordable and should be implemented as soon as possible,” Mr Finny concluded.

ENDS

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