Earlier this year the Northland Chamber of Commerce and other business associations provided a proposal to the Government on what they would like to see come out of the review of business taxation.
The joint proposal was based on the view that the main outcome of the review should be a reduction in the rate of company tax and a narrower gap between the top personal and company tax rates. The Proposal called for company tax rate of 25 percent and the present top and upper middle personal tax rates to be reduced to 28 percent.
The Chamber had a reduction in the tax rates in two steps by 2009/10.
The main criteria adopted by the Chamber in developing a proposal were to reform business taxation in a way that would benefit New Zealand’s Economic Growth and make New Zealand Tax structure internationally attractive especially in line with Australia.
In the lead up to the 2005 General Election the Government has said it planned ‘bold’ moves on business taxation. Our proposal was consistent with that commitment.
The Government, as part of its economic transformation package, has put together a number of initiatives for business to choose from; The Menu includes
Reducing the company tax rate from 33% to 30% (The Chamber proposal recommended that an immediate step be a reduction in the company rate to 30%)
Targeted tax credits for: - R&D activities - export market development activities, and - skills improvement;
Depreciation rate changes
Compliance cost reduction measures.
Peter Dunne from the United Party will be in Whangarei the 10th August 2006. Peter Dunne, in his confidence of supply deal with labour is the Minister of Revenue.
This means that he is solely responsible for all revenue areas and shares responsibility for tax policy with Dr Cullen.
This is a timely opportunity to talk to the minister as he will be able to answer questions regarding the latest ‘menu of options’ for Northland Businesses. We encourage Northland Business to come along ask questions and voice your opinion.
The questions we will be asking include
1. Is a 3% reduction in Company Tax rate a bold move?
2. What about personal tax rates (40% businesses are not incorporated)?
3. Targeted tax credits result from / encourage more Government Intervention - is there any way of getting Government out of the way?
4. How do these items add to United Future’s stated commitment to a low and comparatively flat tax structure?
We look forward to seeing Minister Dunne at the Whangarei District Library Conference room at 2pm on the 10th August 2006.
The Northland Chamber of Commerce is the networking, education, advocacy and marketing group for Northland business, and is part of a nationwide network of 30 and a world-wide movement of 27,000 chambers. Subscription to the free fortnightly chamber e-news can be arranged on info@northchamber.co.nz. Enquiries to 09-4384771 or www.northchamber.co.nz, www.kaiparachamber.co.nz and www.farnorthchamber.co.nz
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