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Tax claims misleading - Business New Zealand

Published: Wed 18 May 2011 11:09 AM
Tax claims misleading
Operating costs and business debt shouldered not only by farms but all businesses are reflected in their level of taxes paid, says BusinessNZ.
Commenting on claims by Labour revenue spokesman Stuart Nash that dairy farmers pay less tax than a salary earner earning $50,000 a year, BusinessNZ said the comparison was misleading.
"Businesses have income structures that take into account the cost of doing business. This is a cost not borne by a salary earner.
"Farm businesses face capital investment and depreciation servicing costs, debt costs, feed costs and labour costs, in the context of fluctuating cash flows often affected by weather, necessitating further debt for operating costs before receiving end of year payouts.
"This means that many businesses would not have the $50,000 income that is being used as a comparison.
"Comparing this situation to an employed person's $50,000 income - that does not have to account for operating and business debt costs - is not a valid comparison."

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