Chris Tremain MP
National Party Associate Small Business Spokesman

22 February 2007

Businesses whacked with $27 million additional tax

Labour's reckless spending is behind a multimillion-dollar increase in the tax take from small and medium sized businesses, says National's Associate Small Business spokesman, Chris Tremain.

"Michael Cullen and Helen Clark's tax-and-spend approach has helped drive inflation and is putting extra pressure on interest rates. Now, it has been revealed the Government plans to take millions more off businesses which miscalculate provisional tax payments."

From March, the Use of Money Interest (UOMI) rates will increase from 13.08% to 14.24%. Use Of Money Interest is the penalty interest charged to businesses which miscalculate provisional tax.

"Based on last year's figures, the spending-fuelled interest rate hike will result in a further $27 million tax windfall for Dr Cullen. Make no mistake - these rates are rising in part because of the Government's loose spending programme.

"Small and medium sized businesses are worst hit because they don't have the ability to pay large accounting fees to plan accurately for tax payments.

"These enterprises are focused on building their businesses, employing people and growing the economy.

"A further $27 million is another kick in the guts from a Labour Government that already has one of the highest tax takes in the world."

ENDS

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