NZ Firms Call For Cut In Tax To Counter Growing Strength Of Kiwi Dollar

by Mary Swire, Tax-News.com, Hong Kong

26 March 2004

A survey of small businesses conducted by the New Zealand Herald has found that many firms want the government to cut the rate of corporate tax in order to negate the effects of the rising value of the country’s currency.

According to the results of the poll, which canvassed the views of both SME bosses and the chief executives and chairmen of larger firms, the level of corporate tax was found to be top of the list of economic factors causing most concern, with an average score of 6.7 out of ten. This was closely followed by the high value of the New Zealand dollar, which averaged 5.9 out of 10.

"If they can't find time to lower the dollar then we should get tax cuts," the general manager of a plastics firm told the Herald. "Business is getting tougher," he added. "The dollar is starting to affect it - it is good for me but not for my customers."

Concern by New Zealand business over the high level of corporate tax would appear to be borne out by the latest global corporate tax survey by accounting firm KPMG. This has shown that New Zealand’s rate of corporate tax remains above the average rates seen in the European Union and the OECD (Organisation of Economic Cooperation and Development).

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