Is the Maldives a model for NZ?

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Is the Maldives a model for NZ?

Postby » Sun May 06, 2018 10:54 am

I was just talking to a friend in the Maldives who runs a small company, and the conversation turned to tax.

The bit I especially found interesting is that companies are not taxed on their first USD$32k of profit. To put this in perspective, the average person earns about USD$3k per year. This would be like NZ saying we are not going to tax the first $500k of profit that companies make.

He was busy sending me photos of all the technology he was playing with, LoRA, IOT, Drones, etc. Simply put, his company has more available money to experiment with and try and develop new technology.

Basically by setting a threshold like this it allows small business to invest what otherwise would have been paid in tax into R&D, trying out new technologies, employing extra staff (unemployment is only about 3% in the Maldvies). It also encourages startups. It is also easy to administer.

Bruce has long talked about failing R&D initiatives in NZ, and I wonder if a similar approach in NZ which be a great boost. This is even easier to administer than tax credits. Basically, as a startup, you only start paying tax once you are "successful".
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Re: Is the Maldives a model for NZ?

Postby aardvark_admin » Sun May 06, 2018 11:34 am

I guess that our government would argue that you don't have to pay tax in NZ until you show a profit either... it's just that you're taxed from the very first dollar of that profit.

The critics would pobably also say that companies will simply wind themselves up when they reach the tax-threshold and start a new company to give them another bite of the tax-free apple.
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Re: Is the Maldives a model for NZ?

Postby phill » Sun May 06, 2018 7:33 pm

i just cant see any companies like fletcher building / google / F&P / nz mining or any dairy making anywhere near that profit per annum
( ,,,,,,,, ....... A E I O U use em sparingly theres probably not enough )

i might live and eat in a sewer .. but hey look how many of these shiny things i have got
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