The New Zealand government has introduced a new tax discount for small businesses and the self-employed in order to relieve the tax burden that many enterprises face in their first years of operation.
Effective from today (April 1), Associate Revenue Minister David Cunliffe explained this week that the new scheme allows qualifying firms a 6.7% discount for every dollar of tax paid during the first year, meaning they will have less tax to pay in year two.
"The discount is designed to reduce some of the financial strain that small businesses face in those vital first three years of business," stated Mr Cunliffe.
"When they begin paying provisional tax, often in their second year of business, people can be hit hard by having to make payments of two years income tax very close together – one for the previous year and one for the current year. That can be a real strain,” he observed.
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