Measures introduced involve employee share schemes and tax relief activated by Order in Council
The Taxation (Annual Rates 24-25, Emergency Response, and Remedial Measures) Bill has passed its third reading before the New Zealand House of Representatives, said Revenue Minister Simon Watts.
The legislation seeks to improve the tax rules, to drive growth, to help businesses thrive, and to support them if they are setting up, expanding, or looking for access to capital or a pool of talented people, said a news release of the New Zealand government.
“Start-ups often have challenges with cashflow, which can make it hard to attract and keep talent, especially when competing with larger, better resourced companies,” Watts said. “One way to address this challenge is through employee share schemes.”
Specifically, the legislation raises the thresholds for exempt employee share schemes in an effort to recognise the impact of past inflation and to offer a buffer against future inflation, Watts said in the news release.
With a better employee share scheme, New Zealand’s companies can be more competitive and can attract top talent, start-ups can succeed more easily, and the country’s economy can grow through innovation and the creation of more jobs, the government’s news release said.
Next, the legislation activates tax relief via Order in Council instead of relying on primary legislation. This change aims to streamline the application of tax relief to future emergencies and to enable those in urgent situations to access relief more swiftly, the government’s news release said.
The government also said that it has passed legislation that enables a final-year fees-free scheme rather than a first-year fees-free scheme and that allows data collection and sharing between Inland Revenue and the Tertiary Education Commission.
This legislation seeks to help the two agencies assess learner eligibility and enable the payment of entitlements to eligible learners, the government’s news release said.
“It’s important we incentivise students to complete their study so we can have a more skilled workforce,” Watts said. “A skilled workforce means we can increase productivity and foster innovation and therefore, grow the economy.”
The government’s news release noted that the Taxation (Annual Rates for 2024-25, Emergency Response, and Remedial Measures) Act is awaiting royal assent.
According to the news release, the Act will also include measures seeking to:
