New Zealand Employers And Manufacturers Favour Tax Cuts

Mary Swire, Tax-news.com, Hong Kong

16 January 2001

There is a growing sentiment in New Zeland that tax cuts would be the key to economic growth. A recently-published survey by the Auckland-based Employers and Manufacturers Association (EMA) found that most employers and manufacturers were strongly in favour of tinkering with the country's tax system.

In a statement, the EMA said: 'Nearly 70% of over 200 companies responding to the survey said lower taxes offered the best chance to boost investor confidence'. Its chief executive, Alasdair Thompson, added: 'Our survey identified there is strong support for making much more extensive and better use of the tax system to boost economic growth'.

The EMA has previously called on the government to reduce New Zealand's corporate tax rate, which stands at 33 per cent. It believes such a move would boost new investment from offshore, while helping lift New Zealand's savings rate.

In the event of the government balking at large-scale reductions in corporate tax levels, employers said that the second best option would be for tax cuts aimed at encouraging exports or to encourage highter investment in research and development.

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