Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Industry Reacts to Move to Close“Tax Loophole”

4 March 2004

Media Release

Industry Reacts Strongly to Govt. Move to Close “Tax Loophole”

The NZ Petroleum Exploration and Production Association today described the decision by the Government to close a tax loophole as a “knee jerk reaction undertaken without industry consultation.

“This is the second so-called tax loophole to be closed within a week – the other relating to stapled securities,” Association Executive Officer John Pfahlert said.

The Government has singled out the oil and gas industry for special treatment, leaving other sectors untouched and still able to offset international losses.

“If the Government is genuinely concerned about the erosion of the tax base then all industries should be treated in a similar fashion,” said Mr Pfahlert.

“We certainly wouldn't describe the current law as a loophole.

“The position in New Zealand has always been that this country taxes income from foreign branches of New Zealand companies and allows any losses to be set off against the onshore income of those companies.”

He said he was unaware of any companies currently operating in New Zealand who had structured their affairs to avoid paying tax.

Mr Pfahlert said that the change announced this morning is lopsided and inequitable in two respects:

1. New Zealand will still tax the income of foreign branches
2. However, losses of foreign branches of those companies who are not in the petroleum mining industry will continue to be deductible.

While the government has announced that it would be consulting industry on the proposed changes, Mr Pfahlert said it is clear that any consultation would be meaningless – since it has already announced that the changes will be effective from today.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Crown Accounts: Slightly Softer Growth Expected In PREFU

A slightly softer growth forecast is the main feature of largely unchanged Pre-election Fiscal Update compared to the Budget forecasts three months ago, Finance Minister Steven Joyce says. More>>

ALSO:

Water: Farming Leaders Pledge To Help Make Rivers Swimmable

In a first for the country, farming leaders have pledged to work together to help make New Zealand’s rivers swimmable for future generations. More>>

ALSO:

Unintended Consequences: Liquor Change For Grocery Stores On Tobacco Tax

Changes in the law made to enable grocery stores to continue holding liquor licences to sell alcohol despite increases in tobacco taxes will take effect on 15 September 2017. More>>

Back Again: Government Approves TPP11 Mandate

Trade Minister Todd McClay says New Zealand will be pushing for the minimal number of changes possible to the original TPP agreement, something that the remaining TPP11 countries have agreed on. More>>

ALSO:

By May 2018: Wider, Earlier Microbead Ban

The sale and manufacture of wash-off products containing plastic microbeads will be banned in New Zealand earlier than previously expected, Associate Environment Minister Scott Simpson announced today. More>>

ALSO: