The Tom Column - Small and medium businesses welcome tax change
Small and medium-sized businesses are the backbone of our communities.
With 97 per cent of all New Zealand enterprises employing 20 or fewer people, it is vital to continuously search out ways to reduce the financial and time burdens that small businesses face.
That’s why the Government, for example, has cut ACC levies. It’s why we introduced 90-day trials and a starting-out wage. It is why we fund the roll-out of faster broadband.
These and other measures help explain why small business confidence is in solid, positive territory in New Zealand.
But there is always more to do.
The Prime Minister recently announced that Budget 2016 will include a positive tax package aimed at making business easier for small and medium-sized business operators.
The package will make paying tax easier and more certain, will reduce the burden of interest and penalties and will assist smaller businesses to better tailor payments to their own circumstances.
• Provisional tax is being reformed with a new pay-as-you-go option to provide smaller businesses a way to pay tax as they earn income from 1 April 2018.
• Use-of-money interest will be eliminated or reduced for the vast majority.
• Contractors will be able to choose a withholding tax rate that suits their needs.
• The ongoing 1 per cent monthly penalty will be scrapped from 1 April 2017 for new debt.
Building a more productive and competitive economy is a priority of the National-led Government. We want businesses to focus their energies on building their businesses, not navigating red tape.
To find out more, and to provide comment on the proposals before they take effect, visit: www.makingtaxsimpler.ird.govt.nz Submissions are requested by 30 May.
As we focus on making sure it’s easier to operate your business, we are continually working towards balancing Government accounts. Recently announced was a $398 million surplus in year end to February. As long as we remain fiscally prudent we are on track to reduce net debt to around 20 per cent of GDP in 2020. Continuing a National led government will ensure we keep on track and keeping our country, our businesses and our communities heading in the right direction.