Small biz tax relief tipped for Key speech

John Key/ Photo Mark Mitchell

Prime Minister John Key is to make a speech on Wednesday outlining measures to help small and medium businesses.

He told Breakfast on TV One this morning there would be a range of initiatives aimed at taking pressure off the sector which employs 95 per cent of New Zealand workers.

Changes would focus on tax, cash flow and regulation.

"It's one plank in a raft of responses from the Government to ensure that we can tackle this economic crisis to the best of our ability," said Key.

The Dominion Post reported the changes included reduced penalties for companies which underpaid provisional tax.

The tax is paid in advance based on estimated earnings. Underpayers get hit with a 14.24 per cent penalty.

Another likely change was to remove the presumption that profits would increase 5 per cent on the previous year for calculating provisional tax.

- NZPA