Budget 2025
The Government has announced its Budget for 2025. The taxation measures in the Budget are:
- Introducing Investment Boost, a tax incentive that supports businesses with an immediate tax deduction for new assets first available for use on or after Budget Day (22 May 2025) – Investment Boost information sheet.
- Changes to Working for Families, including raising the abatement threshold and the abatement rate, and income testing the first year of Best Start.
- Changes to KiwiSaver including increasing the default employer and employee contribution rates, introducing the ability to opt for a temporary rate reduction, extending eligibility for receiving employer and government contributions to 16- and 17-year-olds, reducing the government contribution to KiwiSaver for all members and removing the government contribution for those earning over $180,000 a year.
Budget 2025 also includes an allocation of $35 million a year for Inland Revenue to carry out tax compliance and collection activities, and a continuation of funding of $26.5 million a year provided in Budget 2022 due to cease in June 2025.
Consultation has been launched on the following proposals:
- Empowering families: Increasing certainty and preventing debt in the Working for Families scheme.
- Thin capitalisation settings for infrastructure.
In addition, the Government has announced its intention to proceed with reform previously consulted on:
- Fringe benefit tax – options for change – proposals to modernise the rules and reduce compliance costs.
- Employee share scheme timing issues – proposals to address a taxation timing issue for employee share schemes offered by start-up companies.
For complete coverage of these and other Budget announcements see the information available on the Budget website.