7. JUDY TURNER (Deputy Leader—United Future) Link to this
to the Minister of Revenue
Which items on the Inland Revenue Department tax policy work programme over the last 2 years are direct results from United Future’s confidence and supply agreement?
Hon PETER DUNNE (Minister of Revenue) Link to this
A major provision of that confidence and supply agreement was to have a comprehensive business tax review to ensure the system gives New Zealand businesses better incentives for productivity gains and improved competitiveness. As a result of that review the company tax rate has been cut from 33 percent to 30 percent, the tax rate on widely held savings vehicles has been cut to 30 percent, a tax credit for research and development is being introduced, and a tax exemption for the active income of overseas companies controlled by New Zealanders is being introduced. A new tax regime for charities is also being introduced, which will remove the current donation threshold, meaning that all donations to charity will be tax deductible up to the level of a person’s taxable income. A discussion paper setting out how an income-splitting system for couples with dependent children might work will be released in April next year.
No; in fact, as a result of the Business Tax Review document, which foreshadowed any consequential adjustments to personal taxes, work is commencing on looking at how personal taxes might be adjusted in the light of that and other developments. A discussion paper on payroll-giving to charities is due to be released later this month. Work is also under way on making it possible to claim tax relief on non-monetary donations to charities.
With regard to income splitting, what would the benefits be to a single-income household earning $60,000 a year?
I just happen to have that figure with me. In fact, a single-income household earning $60,000 a year would benefit to the tune of approximately $123 a fortnight, were income splitting to be introduced.
Charles ChauvelHas the Minister received any reports from the charitable sector about the likely impact of the removal of the donation threshold?
Yes, I have. In fact, those reports are extremely positive. A number of charities are reporting that they have been advised, by significant donors, of major donations to be made after 1 April next year. These are donations that would not otherwise have been made but are being made principally as a result of the tax concession that is being introduced. That is good news all round, and a very positive outcome from this policy.