New Zealand offers tax break for the new $1.4 billion ‘cash cow’
A new levy for customers who have a net worth of $100,000 or more will be rolled out in the New Zealand economy on Wednesday.
Prime Minister Jacinda Ardern has announced a new tax credit of up to $1,100 per year for those with a net income of more than $100 million.
It will apply to everyone who has a net wealth of $10 million or more and can be claimed from January 1.
The cash cow will provide a tax break of up for those who earn $100m or more, up to a maximum of $4,500 per year.
New Zealanders earning $10m or less will be able to claim the credit.
A new levy of up of $1 per $1 net worth for everyone with a cash balance of $50,000, will be introduced to help the economy grow.
For those earning more than a $50 million, the tax break will be up to 50 per cent.
There will be no cap on the amount that can be charged.
In addition, the levy will be based on net income, not net wealth.
With the new tax break, people who have more than half their assets in cash will see their tax bill cut by $2,500 annually, while those who have less than half of their assets will be charged a tax cut of $2.50 per $100 of net assets.
While many of the people who are benefiting will be making more than the government is currently expecting, there will be a cap on how much they can pay back.
“The levy will help reduce the impact of the levy on small business owners and those in the middle class,” Arderne said.
However, she noted the tax relief was only available to those with net assets above $100.
More than 50 per “million” will be targeted for the tax credits.
At the moment, only people in New Zealand with a total net worth over $100k are eligible for the financial relief.
Ardern said the levy was part of a larger package to boost the economy.
She said the government would spend $200 million on infrastructure, including new roads, airports, and new rail lines.
But it will not be able take full advantage of the credit, and Arderntn will have to wait until the tax credit runs out before it can roll it out.
Her government had announced last week that it would spend more than twice as much on infrastructure as planned in 2017-18, including $100 billion on new roads.
And she has previously said it would need to invest about $1 trillion over the next 10 years to keep pace with inflation.
As of the end of December, the government had budgeted for an extra $500 million in the next two years to ensure Kiwis could have access to the new cash.
This was based on projected GDP growth and expected unemployment, she said.