The focus for Finance Minister Robertson’s budget is on public service spending (health, education and housing) and investment in infrastructure.
There are two tax-related announcements in the budget:
- Changes to the bloodstock rules that will allow new investors to deduct the cost of high-quality horses acquired for breeding.
- Inland Revenue receives $31.3 million in operating spending over the next four years to carry out its revenue-collecting role. $3 million of this is earmarked to analyse the potential to improve tax compliance in specific industries through the use of third-party reporting and withholding taxes.
The Minister also makes special mention of the tax initiatives that the new Government has already instigated since it took office in October last year:
- Reintroducing an R&D tax credit for New Zealand businesses, with a commitment to lifting research and development spending to 2% of GDP within 10 years
- Introducing ring-fencing to rental losses
- Imposing GST on low-value goods imported by bringing in GST registration for offshore suppliers
- Reversing the previous Government’s changes to the income tax thresholds, and
- Funding boosts to the Working for Families tax packages.
If you would like further information, you can view the full online budget report here.