WELLINGTON, April 23 (Xinhua) -- The New Zealand government announced on Monday it will consider consumption tax rebates for foreign firms buying goods and services from New Zealand businesses.
Revenue Minister Peter Dunne said the country's 15-percent Goods and Services Tax (GST) should be neutral for both resident and non-resident businesses, but New Zealand businesses could claim back GST on purchases.
"It can mean that our GST system is a hurdle for non-resident companies looking to do business with New Zealand businesses, such as in the case of aviation training services provided to foreign airlines," said Dunne in a statement.
GST could be putting New Zealand companies at disadvantage against competitors elsewhere, such as in Australia, which offered "more favorable GST treatment."
Another GST issue affecting non-resident businesses related to costs New Zealand resident manufacturers passed on to customers for the creation or modification of tools required to produce specific products, said Dunne.
A New Zealand manufacturer had to charge GST on tooling costs, even if those tools were used to make products that were exclusively exported.
Dunne said he intended to introduce a GST registration system for non-resident businesses to claim back GST in the same way as New Zealand-resident businesses, and a specific zero-rating rule for tooling costs.
Dunne said he would seek Cabinet agreement to implement the measures by April 1, 2014.
"Kiwi businesses are generally astute and innovative, providing high quality goods and services. By removing GST as an impediment, this will help level the playing field and allow our businesses to compete for contracts internationally," he said.
