New Zealand's Revenue Minister, Peter Dunne, has announced this week that the prescribed rate used to calculate the country's fringe benefit tax (FBT) on low-interest, employment-related loans will rise from 10.57% to 10.90% from the 1st of October this year.
The rate is reviewed regularly to align it with the results of the Reserve Bank’s survey of first mortgage interest rates, and it was last changed with effect from the 1st of April 2008.
The new rate was set by Order in Council this week.
The New Zealand government has announced several business-related tax initiatives this year, including plans to reduce tax-related compliance costs and remove tax impediments to the offshore expansion of New Zealand-resident businesses.
The new business legislation has been introduced with the aim of reducing the compliance costs for businesses, especially small and medium-sized enterprises, which represent a large portion of the economy and tend to bear a disproportionate tax compliance cost burden.
In addition, the 2008 budget has set out a three-year programme of personal income tax cuts worth NZD10.6bn (USD8.3bn), although this is being achieved mainly through manipulation of tax brackets rather than through cuts in tax rates.
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