Tax reform to hit petrol companies

Press, 6 July 1988, Page 4

Tax reform to hit petrol companies

PA Wellington The Taxation Reform (No. 4) Bill discriminates against New Zealand petroleum exploration companies, a parliamentary select committee was told yesterday. Presenting a joint submission from petroleum companies a lawyer, Mr James Willis, told the finance and administration select committee the industry was concerned at the way the legislation intended to achieve tax neutrality. The stated objective of

most of the reforms was to make the petroleum exploration industry competitive with other industries. Mr Willis said the industry did not seek special incentives or concessions but .it did not think the proposed legislation achieved competitive neutrality. “There are numerous instances in our minds where the legislation puts the petroleum industry in a position where it is subject to uniquely adverse tax discrim-

ination,” Mr Willis said. The taxation policy should apply to both domestic and international operations. At present, the domestic tax policies of international explorers would place New Zealand companies at a disadvantage in their New Zealand operations. The legislation should address some of the discretions in favour of the Government which was itself not neutral in the resource sector, he said.