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Tax measures passed under urgency to help businesses

26 Mar 2020  By Shannon Williams | | @tourismticker

The Government has passed legislation under urgency to provide tax relief to businesses.

The Covid-19 Response (Taxation and Social Assistance Urgent Measures) Bill was designed to prevent and mitigate risks to the New Zealand economy, said revenue minister Stuart Nash.

Under the bill, businesses could immediately claim tax deductions for low-value assets like computers, mobile phones, cameras, microphones, headphones and other equipment required to work from home. The threshold would increase from $500 to $5000 for assets purchased in the 12 months from 17 March 2020, reducing to $1000 from 17 March 2021.

Stuart Nash

Penalties for late tax payments would be written off, and tax planning and certainty would be restored through the ability to depreciate some buildings.

The bill would increase the provisional tax threshold from $2,500 to $5,000, relieving compliance burden for small businesses as well as freeing up cashflow. It would benefit an estimated 95,000 people, Nash said.

The bill would allow Inland Revenue to cancel interest on a late tax payment if the taxpayer’s ability to make a payment due on or after 14 February 2020 was significantly adversely affected by the Covid-19 outbreak.

“This bill is one part of the Government’s response. It includes targeted measures to provide relief to people and businesses economically affected by the Covid-19 outbreak. It also includes measures aimed at addressing the broader economic impacts of the outbreak,” Nash said.

In a bid to further help individuals, an immediate six-month freeze on rent increases and further protection for tenants in residential housing were announced as part of the Government’s measures to help New Zealanders get through the four-week lockdown.

Housing minister Megan Woods said tenancies would not be terminated during the lockdown period, unless the parties agreed or in limited circumstances. Tenants who had previously given notice would be able to stay in their homes if they needed to.

Moving house was unlikely to be considered ‘essential’ during the lock-down.

Megan Woods

“These changes will ensure that people can stay in their homes during this challenging time. This enables families and individuals to self-isolate, to stay home and maintain physical distancing, supporting the public health of all New Zealanders,” said Woods.

“It also means that in the short term, families and individuals who are tenants do not lose their home due to a drop in income related to job losses through Covid-19.”

Woods added it was not acceptable for tenants to abuse the current situation by refusing to pay rent when they had the capacity to do so, or to cause significant property damage.

“Tenants are still fully liable for their rent payments and any damage as we ensure that landlords do not increase the burden on tenants,” she said.

Landlords who breached rent increase provisions or tenancy termination provisions constituted an unlawful act, and faced damages of up to $6,500.

Tenants who had symptoms of Covid-19, or were confirmed positive, was not grounds for termination. Tenants are not required to notify their landlord if they tested positive for the virus, but were encouraged to do so, Woods said.


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