Covid 19: Tax help for Hawke's Bay businesses

A tax loss carry-back scheme has been introduced to help small businesses. Photo / File

Hawke's Bay businesses waiting to see if Cabinet permits domestic tourism this week may already have a potential cash bonus looming.

Napier MP Stuart Nash, who is also the Minister of Revenue and Small Business, urged all Small to Medium Enterprises (SMEs) to look into potential tax entitlements.

SMEs have been thrown "a cash lifeline" last Thursday when the Covid-19 Response (Taxation and other Regulatory Urgent Measures) Bill was pushed through all stages of parliament.

Nash said the bill "delivers the single biggest government support package to businesses via the tax system in modern New Zealand history".

The bill gives businesses potentially more than $3 billion in tax refunds as they deal with the economic impact of Covid-19.

The bill introduces a tax loss carry back scheme which provides cashflow quickly by allowing losses to be carried back one year.

"The tax refunds will be a cash lifeline for businesses with non-wage fixed costs, like rent, interest and insurance.

"Some don't want to take on extra debt with a bank loan. Without this support these otherwise viable SMEs may be forced to close."

Nash said for a number of companies this is "substantial".

To access the support Nash said the first thing businesses should do is talk to their accountant, bookkeeper or tax agent or log on to the MyIR portal.

Nash said the impact of the support has not been broken down region by region, but Hawke's Bay is a region with a lot of very successful manufacturing companies, retail, tourism and hospitality businesses which would normally do well but may end up making a loss this year due to Covid-19.

"For many profitable businesses they are vulnerable at this point and anything we can do to get money in their back pocket is helpful."

Nash said Hawke's Bay has the potential to bounce back well as much of the economy includes primary industries but due to the reliance on tourism, domestic tourism should be encouraged.

Cabinet is discussing if domestic tourism would be allowed under level 2 this week, he said.

Spending money locally is also "very important" in helping Hawke's Bay businesses and the local economy.

Nash said his family had been purchasing food from local restaurants and cafes, but people should also look at spending locally in terms of retail and clothing needs.

"It is important it really is; we do need to support our local businesses because these are the ones who employ people who spend money in our economy".