Reserve Bank papers on income tax paid by NZ banks

Media release

For immediate use

13 August 2004

Re. Reserve Bank papers on income tax paid by New Zealand banks

Bank of New Zealand said today that it was confident that it was meeting all of its legal obligations regarding income tax in New Zealand.

Specifically, Bank of New Zealand said statements in Reserve Bank papers that Bank of New Zealand’s effective tax rate was 7.5% in 2003 were inaccurate and misleading.

Bank of New Zealand spokesman, Owen Gill, said:

“To draw an analogy, counting the tax paid through a bank’s imputation credits account is like saying an individual’s provisional tax payments are the total tax that person paid in a year. Generally, that’s not the case.

“The Reserve Bank has omitted a substantial further sum of taxes, tax refunds, or tax credits in its calculations regarding Bank of New Zealand.

“Notwithstanding that point, Bank of New Zealand – which is one of the larger taxpayers in New Zealand – will work with the Government regarding any policy changes that the Government might propose regarding taxation as it applies to banks operating in New Zealand.”

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