Some highlights from the Budget according to the Herald.
- The company tax for most firms falls from 30 per cent to 28 per cent next April, stealing the march on Australia and worth $340 million to business next year and $450 million the following year before falling to $305 million in 2013/14. This has the effect of spreading a general benefit over the country’s 360,000 companies.
- The savings industry gets a boost with the top tax rate for most portfolio investment entities (PIEs) including KiwiSaver accounts being cut from 30 per cent to 28 per cent. The tax rate for savings vehicles – unit trusts and superannuation funds – will also fall. The changes will cost the Government $15 million in 2010/11, rising to $60 million a year by 2013/14.
- Personal tax cuts from October 1 will fuel more spending. Someone on the average wage of $50,000 a year will get an extra $29.40 a week, reducing to a net gain of $13.70 with the new 15 per cent GST rates.
The areas which will miss out according to the Herald
- From next year there will be no depreciation deduction allowed on buildings with a useful life of 50 years or more for commercial and industrial buildings. This will be introduced from April 1 and raise $455 million a year from the commercial sector by 2013/14.
- Rental houses will also lose the ability to claim depreciation and this will cost landlords $235 million.
- Under changes to thin capitalisation rules foreign-owned companies will be able to claim tax deductions for interest payments on debt of only up to 60 per cent of their local asset value rather than 75 per cent at the moment. This will raise $200 million next year
So thats just a few of the pluses and minuses on the budget.
You can read the whole article here http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=10646413