Tax cuts unlikely to benefit NZ-grown software firms

A remittance of GST would be more beneficial, says New Zealand Software Association

The business tax-cut proposals being floated by the Minister of Finance, Michael Cullen, probably won’t benefit the local software industry much, says New Zealand Software Association president Chip Dawson. This is because the local industry mostly consists of small- to medium-sized companies.

“The people in our industry who benefit will be the large corporates, like SAP and Microsoft,” he says.

The sector needs incentives to grow and amalgamate — and to attract business to New Zealand, says Dawson.

The tax deductions for research and development that have been suggested could help somewhat, but a remittance of GST — as was done to encourage local film-making efforts — would be more beneficial, says Dawson.

The Government should come to the party as a model user, he says.

“There should be a preferred list of suppliers, who can do the work locally, so government agencies don’t always think they have to go offshore.”

Xsol chief John Blackham, who recently spoke out on the tax issue, was unavailable for comment.

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