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Government tinkers around R and D tax deductibility

David Clark
Revenue Spokesperson

Megan Woods
Innovation, Research and Development spokesperson

Government tinkers around R and D tax deductibility

The Government’s call for feedback to resolve problems around the tax deductibility of research and development expenditure for businesses is more tinkering and shows a government out of touch with the needs of business, says Labour’s Innovation, Research & Development spokesperson Megan Woods and Revenue spokesperson David Clark.

“We don’t need small scale thinking, we need a big bold initiative that will allow businesses to do what they do best: innovate,” says Megan Woods.

“Steven Joyce and Todd McClay have admitted that our tax system is getting in the way of New Zealand businesses’ ability to innovate and reach their potential. They know there is a link between our tax system and innovation. This latest announcement is nothing more than further tinkering around the edges,” says David Clark.

“When National was elected in 2008, one of their first moves was to scrap research and development tax credits Labour established. They’ve spent five years testing out failed grant schemes, such as the Tech transfer vouchers,” says Megan Woods.

“These schemes have failed because they’ve placed too much onus on businesses. It’s time National realised this and faced facts, the best tool left in the toolbox is R&D tax credits and they should be reintroduced immediately.

“Countries similar in size to New Zealand like Finland, Singapore, Denmark and Israel put substantial emphasis on increasing R&D done by business through government support. At the last election Labour campaigned on reintroducing r&d tax credits at a rate of 12.5% because this is the sensible thing to do, for businesses and New Zealand’s innovative future.”

ENDS

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