The proposed Capital Gains Tax would discourage those trying to get a business going and hurt our innovators and entrepreneurs, National’s Finance Spokesperson Amy Adams says.
“One of New Zealand’s biggest economic challenges is getting more investment into productive enterprise and adding more taxes from those who are brave enough to give it a go would be a giant leap in the wrong direction
“This will be particularly hard for the 97 per cent of our economy that is made up of small businesses. And for the 630,000 people that small businesses employ.
“It is telling Kiwis – don’t start a business, don’t innovate and don’t be an entrepreneur, because the harder you work, the more you’ll be taxed. It puts yet more roadblocks in front of people motivated to work for themselves. Building a business creates jobs and helps the whole country.
“Business owners get paid last and most have at some stage feared whether they will get all the bills paid that month. Business owners routinely reinvest their tax-paid-income back into growing their business. Under a CGT doing that will just see them taxed even more and make taking those risks even less worthwhile.
“Not only will businesses face a Capital Gains Tax on everything they’ve built up, those operating from their homes will face a double whack.
“Many of our businesses began at the kitchen tables or garages of innovative New Zealanders. Under the proposed CGT, if the home remains part of the business’s operation they will lose their family home exemption, unless they give up the legitimate deductions they currently receive for working from home.
“If the business is classed as using more than 50 per cent of the floor space, then the exemption is gone regardless.
“Why should those trying to get ahead face harsher tax laws for their homes than others. It’s not right and it is certainly not fair.
“Starting and running a business is hard work and owners put their own sweat into it. For many when they sell, the pay back they get is through goodwill such as the value of loyal customers, sales orders and a recognisable brand.
“Many business owners see it as their retirement nest egg, having spent a lifetime working hard and paying tax to have something to live on when they’re older.
“The recommended rollover provisions for small businesses only cover gains on asset sales that are re-invested. That is cold comfort for those who sell their business on retirement. Larger businesses look like they may get no rollover relief at all, limiting their ability to grow and expand.
“This Government is sending all New Zealanders a message that the harder you work, the more they’ll make you pay. National believes you should keep more of what you earn. National will fight the Government’s proposed tax grab every step of the way. We will repeal a Capital Gains Tax and will not introduce any new taxes in our first term.”