Robin Oliver: OliverShaw Tax Partner on the Government hinting towards changes to corporate tax settings

New Zealand could have one of the least competitive corporation tax rates - but that could change by May.

The Prime Minister has hinted this year's Budget could make way for relief. 

The rate has stayed on 28 percent since 2011 - but Finance Minister Nicola Willis is making comparisons with countries like Ireland, with a 12.5 percent rate.

Advisory expert Robin Oliver says such a change would have a big impact.

"If we went down to 25, that'll cost us about a billion dollars per annum in tax - and that still wouldn't be much competitive compared to these small, open economies."

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Episode Transcript

Speaker 1 (00:00):
On the show yesterday that yesterday this is going for
growth theme. I asked Nichola Willis, the Finance Minister, if
she would cut the corporate tax rate.

Speaker 2 (00:08):
We're not as competitive as we used to be. We
can't take a tax off the table because it could
make a difference to our competitiveness. We always have to
balance that against our other pressing needs.

Speaker 1 (00:20):
She has said she is actively looking at the corporate
tax rate. Currently it sits at twenty eight percent. The
OECD average is twenty four percent. We've been at twenty
eight since twenty eleven. Singapore's corporate rate is seventeen. Ireland's
is twelve and a half. Remember Ireland, we all want
to be like Ireland. To discuss tax advisory expert Robin
Oliver from Oliver Shaw is with me, Good evening evening.

(00:43):
How do we rank.

Speaker 3 (00:47):
Really lobally? As a bitister said, we're not competitive internationally
and particularly for a small country. We're more like Ireland
in Singapore, as you say, seventeen twelve point five, not
like the UK and Europe twenty five, US twenty one.
We are twenty eight. We stand out uncompetitive and I

(01:09):
think the government's right to say we want to be Ireland,
we want to be Singapore, a successful small open economy.

Speaker 1 (01:16):
How low can we go?

Speaker 3 (01:20):
Well, the governments that a buide. It's made for your
commitments to balance the books and what have you, but
to be very hard to do that if you're going
to cut taxes, because you have to have more expenditure
reductions and so forth. So the government's going to sit

(01:41):
back and really strategically think of how we put tax
in the next there's no point in us having a
marketing campaign to be Ireland or Singapore where we don't
have the product yourself, which is where we are. And
so we've got twenty eight percent well down to twenty
five that will cost us about a billion dollars paradum

(02:03):
and tax, and that still wouldn't be much competitive compared
to these small open economies. So we really have to
be bowl but targeted.

Speaker 1 (02:14):
What do you mean targeted?

Speaker 3 (02:16):
Who do we target?

Speaker 1 (02:17):
How do we target them?

Speaker 3 (02:19):
Targeted to where the tax cost is really affecting our
productivity and economic growth for most, not across the across
the board and be lovely, but where it's affecting it
the most, and that tends to be fine. Investment and
globally mobile talent. And there are many options here, you know,

(02:42):
one is to allow expensing deduction for the fore cost
of investment assets car'd to be sheeding, and you can
do things like say, and that's very expensive to do,
but you can say, well, we will allow you to that.
The forecast of new card and machinery over five years.

Speaker 1 (03:04):
The fastest, the fastest appreciation. Robin, we did discuss that
with Nikola Willis as well and she said that is
absolutely on her radar as well. So there are a
couple of options I guess under the umbrella of texts
that they could look at. Robin, thank you very much
for your time. We have to leave it there. Robin Oliver,
tax advisor with Oliver Shore. For more from Hither Duplessy
Alan Drive, listen live to news talks. It'd be from

(03:26):
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