Discount for first-year business tax

Self-employed people who pay provisional tax in their first year of business will soon be eligible for a 6.7 per cent discount, the Government said today.

Associate Revenue Minister David Cunliffe said it was part of a raft of measures being introduced this year to simplify tax for small businesses.

"Businesses do not have to pay tax on income earned during their first year until the second year, but both year's payments can be due about the same time -- which can be a real financial knock-back for some small businesses," he said.

"We are offering an incentive to first-year self-employed people to make voluntary tax payments during their first year of business.

"If they take up the offer they will receive a 6.7 per cent discount for each dollar of tax paid during the first year."

Mr Cunliffe said the discount would be in a tax bill expected to be introduced to Parliament in the next few weeks.

- NZPA