Tax changes could be years away

Michael Cullen

Changes to business tax could be more than two years away, Finance Minister Michael Cullen says.

The Government will begin a review of the business tax regime this year.

Dr Cullen and Revenue Minister Peter Dunne are working on proposals, which will go out for public consultation by mid-June.

The review is part of United Future and New Zealand First's support agreements with Labour. Both parties support reducing the business tax rate from its current 33c in the dollar.

But Dr Cullen said people should not expect changes to take place at lightning speed.

"Once you decide you want to do something, there is a process of consultation, there's legislation, then you have to have lead times for introduction," he said on National Radio today.

"So in practical terms any major taxation moves which are restructuring moves of this sort, you are looking at 1 April, 2008."

Dr Cullen said even if a discussion document went out today, the Government would struggle to get any changes implemented by the start of the 2007 business year.

"We are for that date concentrating on the Kiwisaver scheme designed to lift our savings to help adjust our long-term current account deficit problem."

He said structural changes to tax, if they occurred, would be significant and that meant there had to be proper consultation so the financial community knew what was happening.

- NZPA