TAX TIDBITS
Issue Ten, July 2006
In this months issue:
Business Tax Review
Paid Parental Leave
Fine Defaulters
BUSINESS TAX REVIEW
The Government has recently released a discussion document with several proposals to reduce the tax burden on business. The idea of this review is to promote incentives for increases in productivity through business investment, higher levels of innovation and skill as well as increasing New Zealand’s competitiveness with Australia. The key talking point was the proposed lowering of the company tax rate from 33% to 30%. This would still be higher than the current OECD average of 28.5%, and only meets Australia’s current company tax rate, however, is it movement in the right direction.
The discussion document also tables other tax measures such as: -
- Targeted research and development tax credits
- Export market development
- Enhancements to current tax depreciation rules
- Allowing tax deductions for certain black hole expenditure
Payroll taxes have been removed from the Government’s agenda which is good news for most. A payroll tax would have created an administrative headache as well as driving down wages due to employers having to bear this extra cost. Changes to personal or trust taxation are unfortunately outside the scope of this report so for a lot of New Zealander’s it will be a case of wait and see. The closing date for submissions on this report is September 8 with any initiatives given the green light likely to be in effect from 1 April 2008.
PAID PARENTAL LEAVE
As of 1 July 2006, self-employed mothers are eligible for 14 weeks of paid parental leave under recent government legislative changes. The changes apply to self employed mothers who have been working an average of 10 hours or more per week during either a six or twelve month period immediately before the birth or adoption of a child. Mothers will also have the same right to transfer this leave to eligible partners. Parental leave payments for the self-employed will equal their average weekly income, up to the maximum rate paid to employees. Those who make a loss or earn less than the minimum wage for at least 10 hours per week will be entitled to payments for 10 hours a week at the minimum wage.
FINE DEFAULTERS
Recent legislative amendments mean that the Ministry of Justice can obtain more information from the Inland Revenue to locate individuals who default on payment of their fines. The new information includes the name, address and phone number of the fines defaulter's employer. The Ministry of Justice is already able to access the fines defaulter's last known address, the date when that address was last changed, if known, and the fines defaulter's telephone number.
Upcoming events at HWI:
FREE Seminar: How to take property off your worry list. Wednesday 23rd August 2006 at 9am,
email Mark at
maldridge@hwi.co.nz
for details or book online at
www.hwi.co.nz
Disclaimer Information contained within this document is of a general nature and does not constitute advice. Readers are cautioned not to act or reply on it without first seeking professional advice.
