A Labour Government in New Zealand would offer targeted tax incentives to those investing in the timber processing industry, according to a new action plan published by the opposition party. Source: Tax News
Labour’s “Economic Upgrade” document pledges the introduction of a “tax deferral” for investment in plant and equipment in the forest and wood products industry by means of an accelerated depreciation provision.
It would also reinstate a targeted research and development (R&D) tax credit to encourage stronger private investment in high-quality R&D.
Announcing the plans, Labour leader David Cunliffe attacked the Federal Government’s decision to scrap the depreciation facility in 2010, describing it as a short sighted decision that has made it harder for businesses to invest in new capacity.
He estimates his policy will increase capital expenditure in the wood processing sector by between NZ$40m and NZ$80m a year.
“A targeted tax incentive is needed to overcome the increased risks which wood processorsface in a small economy,” said Labour’s Finance spokesperson David Parker.
“This will encourage the substantial capital investment needed to maximize value from our wood industry. It will enable the modernization of our wood products industry and allow the sector to link into the global value chain.”
A general election is scheduled September.
