NZ First right to target company tax, but reform should go further

Responding to New Zealand First’s proposal for a 20 percent company tax rate for SMEs, Taxpayers’ Union spokesperson Tory Relf said:

“NZ First is right to identify New Zealand’s high company tax rate as a barrier to investment, and the intention to bring it down is welcome.

“But carving out a special rate for businesses below an arbitrary turnover threshold risks creating another distortion in the tax system. A better approach would be to lower the company tax rate across the board.

“Better still, as we set out in our Going for Growth paper, full capital expensing would directly reward businesses that invest in new equipment, technology and growth by allowing them to deduct those costs immediately. If the goal is more investment and higher productivity, tax reform should be designed around exactly that.”