R tax credits good news in a construction economy
Accounting and business advisory firm Staples Rodway has welcomed the return of Research and Development Tax Credits.
“Research and Development is crucial to the growth of the New Zealand economy. While this is was well signalled in the
election campaign, it’s great to see a billion dollars being spent, which is more than we expected,” says Mike Rudd,
Staples Rodway Tax Director.
Budget 2018 takes into account $5.3 billion from a growing economy as forecast in the Pre-Election Economic and Fiscal
“This figure contrasts with Staples Rodway’s inaugural Business Confidence Survey of 500 business leaders released this
week which showed 55 per cent
believed the economy would decline over the next year. It also contradicts Labour’s election campaign where they
claimed economic growth wasn’t strong.”
“It’s interesting to see Budget 2018 announce $23.5 million over the next four years to chase unfiled corporate tax
returns. The need for this is surprising given companies are already penalised through the use of money interest regime.
This is a tax group which is already very visible and compliant, it’s hard to believe that $183 million would be
gathered from this exercise.”
“The increase in the minimum wage to $20 by 2021 is effectively outsourcing tax cuts for low income people to the
private sector. The Government has recognised the impact of inflation on its budget, but it’s not adjusting the tax
bands for individuals. Bracket creep means that as incomes go up through cost of living increases the tax rate bands are
stuck where they were ten years ago.”
This means Tax Freedom Day, which is calculated by Staples Rodway will likely move further out from May 7thwhere it fell
“The Labour Government is so far living up to its promises of no new taxes and balancing the books. This should help
with business confidence.”
“The most surprising thing in the Budget was the winebox champion bringing back a 1980s’ tax dodge with Bloodstock tax
rule changes. Bloodstock was one of the classic 1980s tax dodge industries. At $4.8 million this is unlikely to be a big
issue, but ironic all the same,” says Mr Rudd.