Long legislation reaches final steps

Press, 7 December 1988, Page 8

Long legislation reaches final steps

By

PATTRICK SMELLIE

One of the largest pieces of legislation introduced into Parliament began the final steps towards passing into law last evening when it was reported back to the House from the Select Committee stages.

The Income Tax Amendment Bill (No. 6) covers a new tax regime to stop international tax avoidance through the use of tax havens and other vehicles for dodging tax in New Zealand. The bill has been widely criticised for being so tough as to discourage investment by New Zea-

land companies in other countries and overseas investment in New Zealand.

The Opposition spokeswoman on finance, Miss Ruth Richardson, said the bill reflected attempts by the Government to play to the Left wing of the Labour Party, with “antibusiness prejudices.”

But the Minister of Revenue, Mr de Cleene, said the bill was based more on making the tax system fair than on revenue considerations. “This is bill that says no longer will people be able to avoid domestic tax by employing some of the better lawyers and ac-

countants in this country to secrete it in Hong Kong, or to hide it in Vanuatu, or to make it disappear via the Cook Islands like Mandrake the magician.” The top 10 companies in New Zealand were paying a maximum of 14c tax in the dollar at a time when the statutory tax rate for companies was 48c in the dollar, Mr de Cleene said. The new international tax regime was a trade-off for lowering the company tax rate to 28c in the dollar.

The House is considering the bill under urgency.