Govt to consult on vine & fruit trees tax regime
Govt to consult on tax regime for fruit trees & vines
The government will consult widely with the fruit growing industry over a proposal to make the tax treatment of replacement plantings of fruit trees and vines more flexible, Revenue Minister Michael Cullen said today.
“The government proposes to introduce legislation to allow a limited proportion of replacement planting to be tax deductible in a current income year,” Dr Cullen said. “At present, a current year deduction is possible only for a tree or vine of the same species and variety that has died or been destroyed.
“Under the new system, some replacement planting expenditure would be treated as repairs and maintenance. On average, expenditure in relation to 5 per cent of the area of an orchard would be deductible in a single income year, and growers could replace plants when they wanted to, using different varieties if they wished.
“This would give more flexibility in the tax treatment of replanting activities and encourage the planting of the most commercially desirable varieties.
“The government has already had discussions
with the Fruitgrowers Federation and wants to extend the
consultation over the next few weeks to include other
industry bodies,” Dr Cullen said.