New Zealand's company tax rate will be a cent lower than Australia's next year, after new Australian Prime Minister Julia Gillard today said the rate would be cut to 29 percent by 2013-14 but would not be further reduced.
Ms Gillard revealed the company tax decision today when announcing a compromise over a super profits tax which will see her Government receive more than a billion dollars less revenue.
Finance Minister Bill English said the news was good for New Zealand.
"Taken together with other measures in the Budget, the reduction in New Zealand's company tax rate to 28 percent from the 2011/12 income year will help our competitive position and help provide businesses with the right incentives to invest and export," Mr English said.
"It is significant that from next year New Zealand's company tax rate will be two cents in the dollar below Australia's for two years and then one cent lower. That hasn't happened for many years.
"New Zealand's Budget tax package is unique. We have been able to change the tax mix, including significant income and company tax cuts, at a time when many other countries are increasing taxes to tackle rising debt and snowballing deficits."
NZPA