Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 


High interest, high business tax rates penalising investment

High interest, high business tax rates penalising investment


While we do not agree companies operating in New Zealand should aggressively seek to pay the minimum tax possible in New Zealand, this is no time to be signaling we are about to tighten our company tax rules, the Employers and Manufacturers Association says.

The statement is in response to the release of an Issues Paper by Inland Revenue yesterday which ostensibly would tighten the rules on deductions claimed on interest paid in New Zealand by non-resident investors.

The Issues Paper also has ramifications for the low levels of tax collected in New Zealand on profits made here by global giants such as Google and Apple.

"The far bigger issue at stake is the urgent need to attract much more foreign investment into local productive enterprises," said Kim Campbell, EMA's chief executive.

"The larger challenge for us is how can we reduce our high company tax rate or develop other ways to make New Zealand a far more attractive investment proposition," he said.

"The focus should be on finding new ways to attract much more foreign direct investment here.

"While we support in principle proposals to plug perceived gaps in the thin capitalisation rules the overall emphasis on this just now is simply not justified.

"This is no time to be putting up possible deterrents to investment when we have many large scale infrastructure projects required, the rebuild of Christchurch, and the urgent need to recapitalise our industrial base, especially in Auckland.

"Though the rule changes proposed at first glance would place foreign equity investors on the same basis as wholly owned local investors, everyone also knows it is possible to ensure tax can be paid in the country where the tax rate is lowest, with the costs falling, including the costs of debt, where the tax rates are highest.

"The changes proposed by IRD would still allow this to occur for many global businesses.

"Global companies are constantly manoeuvring to domicile their payments where they can maximise the legitimate income from their IP and minimise their tax obligations.

"The issue the IRD should be addressing is how can we drastically reduce New Zealand's high interest, high company tax regime to make New Zealand a far more attractive place to invest while protecting the tax base."
ends

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

Parliament Today:

Werewolf: The Defence Pretence

Last year, the world began spending more money on weapons again, for the first time since 2011... New Zealand belongs to a region – Asia and Oceania – where military spending rose sharply in 2015, by 5.4 per cent. More>>

ALSO:

Gordon Campbell: On Not Crying Foul, Argentina

So a couple of guys found to be criminally liable of environmental pollution in Argentina lodge an application with the Overseas Investment Office… in order to buy some prime New Zealand rural land. Seems that their factory back home had carelessly and/or intentionally discharged toxic waste into the Lujan river. Bummer... More>>

ALSO:

Urban & Rural: $303m To Merge And Modernise New Zealand’s Fire Services

Internal Affairs Minister Peter Dunne today announced funding of $303 million over five years to combine urban and rural fire services into one organisation from mid-2017. More>>

ALSO:

High Trust Regime: What Did The PM Tell His Lawyer About Foreign Trusts?

The Government stopped the IRD from reviewing New Zealand foreign trusts shortly after the Prime Minister’s lawyer wrote to the Revenue Minister claiming John Key had promised him the regime would not be changed. More>>

ALSO:

Road Crime: Wicked Campers Vans Classified As Objectionable

The definition of publication includes any "thing that has printed or impressed upon it, or otherwise shown upon it, 1 or more (or a combination of 1 or more) images, representations, signs, statements, or words", The Classification Office has previously classified such 'things' as billboards, t-shirts, and even a drink can. This is the first time the Classification Office has classified a vehicle. More>>

ALSO:

'When New' Repairs: Landmark EQC Settlement

The Earthquake Commission has cut a deal with 98 Canterbury homeowners that affirms the government entity's responsibility to repair earthquake-damaged property to a 'when new' state, as well as covering repairs for undamaged parts of a property and clarifying its position on cash settlement calculations. More>>

ALSO:

Gordon Campbell: On Kiwirail’s Latest Stint In The Dogbox

The denigration of Kiwirail continues. The latest review (based on a 2014 assessment) of the options facing the company have enabled Kiwirail to be hung out to dry once again as a liability and burden on the taxpayer. More>>

ALSO:

Royal Society Report: Good Opportunities To Act Now On Climate Change

There are many actions New Zealand can and should take now to reduce the threat of climate change and transition to a low-carbon economy, a report released today by the Royal Society of New Zealand finds... More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news