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

Gordon Campbell:
On The National Leadership “Contest”

Key’s endorsement of English has turned this “contest” into a race for second place.

This succession was well planned. Lets not forget that English was told by Key in September of his intention to resign, and English was the only member of Cabinet entrusted with that information before it was sprung on everyone else on Monday morning. More>>

Latest: Judith Collins has withdrawn from the leadership race, conceding that Bill English has the numbers to win.

 

Education: Charter Schools Misleading Pass Rates

Labour: NCEA results for charter schools have been massively overstated... In one case a school reported a 93.3 per cent pass rate when the facts show only 6.7 per cent of leavers achieved NCEA level two. More>>

ALSO:

Rebstock Report Resolution: SSC Apologises To Derek Leask And Nigel Fyfe

Following a complaint by Mr Leask, the Ombudsman found that the State Services Commission acted unreasonably in relation to Mr Leask and identified numerous deficiencies in the investigation process and in the publication of the final report and in the criticisms it contained of Mr Leask... More>>

ALSO:

International Rankings: Student Results 'Show More Resourcing Needed'

NZEI: New Zealand had only held relatively steady in international rankings in some areas because the average achievement for several other OECD countries had lowered the OECD average -- not because our student achievement has improved. More>>

ALSO:

Earlier:

Salvation Army Report: Beyond The Prison Gate Report

A new Salvation Army report says changes must be made to how prisoners re-enter society for New Zealanders to feel safe and secure in their homes and communities. More>>

ALSO:

Surprise Exit: Gordon Campbell On The Key Resignation

The resignation of John Key is one thing. The way that Key and his deputy Bill English have screwed the scrum on the leadership succession vote (due on December 12) is something else again. It remains to be seen whether the party caucus – ie, the ambitious likes of Steven Joyce, Judith Collins, Paula Bennett, and Amy Adams – will simply roll over... More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news