National can reveal that more than 500,000 small businesses would be hit by the Government’s proposed Capital Gains Tax and no region of New Zealand would escape this damaging new tax, Leader of the Opposition Simon Bridges says.
“In the Waikato, for example, some 56,073 businesses would be at risk from a Capital Gains Tax, based on Stats NZ’s Business Demography figures, hitting everything from biotechnology and agricultural start-ups to packaging, food processing and data analytics firms.
“Some 29,187 Otago businesses would be caught in the extended tax web, ranging from tourism ventures to engineering firms, cancer diagnostics and computer graphics companies. Nationally, 569,907 businesses could be hit.
“Small businesses make up 97 per cent of all businesses but the Government is ignoring them and the damage it would inflict. In MYOB’s latest survey, more than two-thirds of them opposed a Capital Gains Tax. No wonder the economy is weakening, business confidence is near record lows and the Reserve Bank is considering rate cuts.
“It may surprise the Government that small businesses are unhappy because it isn’t listening. The Tax Working Group didn’t even count small businesses when it tried to estimate how much extra revenue the Government would take from a Capital Gains Tax.
“The Tax Working Group report says elements of the tax base including shares in private companies and intangible property such as goodwill ‘are not known and so are not costed’. That means it didn’t count small businesses or the value of their owners’ hard slog.
“Because the TWG did not count small businesses in its revenue projections, it is highly likely that a Capital Gains Tax will raise a lot more revenue than the $8 billion over five years it has projected.
“A Capital Gains Tax would hit kitchen-table start-ups, those wanting to raise capital and it would clobber business owners who want to sell up and retire. Before then they’d be hit with increased costs such as having to get their business valued.
“The message it sends is don’t bother starting a business because the Government will tax your efforts. Instead of discouraging our innovators and entrepreneurs we should be encouraging them to grow and create jobs.
“National believes New Zealanders should keep more of what they earn. We will fight the Government’s proposed tax grab every step of the way. We will repeal a Capital Gains Tax and we will not introduce any new taxes in our first term.”