O 17 March 2020, the New Zealand Government has unveiled a NZD 12.1 billion COVID-19 response package. From the package NZD 5.1 billion is allocated in wage subsidies for affected businesses in all sectors and regions, NZD 2.8 billion in business tax changes to free up cash flow, including a provisional tax threshold lift, the reinstatement of building depreciation and writing off interest on the late payment of tax.
There are five proposals related to tax.
- Giving Inland Revenue the discretion to remit use-of-money interest (UOMI) for customers significantly adversely affected by COVID-19.
- Increasing the provisional tax threshold from NZD 2,500 to NZD 5,000 from 2020/2021.
- Increasing the small asset depreciation threshold from NZD 500 to NZD 1,000 – and to NZD 5,000 for the 2020/21 tax year.
- Allowing depreciation on commercial and industrial buildings from 2020/2021.
- Removing the hours test from the In-Work Tax Credit (IWTC) from 1 July 2020
