There are a few things in the budget that affect business such as the changes to KiwiSaver, the Business Boost package, as well as more money being allocated to chase tax evaders.
The main changes to Kiwsaver are:
Reduction in the annual Government contribution from $521.43 to $260.72 and eliminated completely for those earning over $180,000.
The Employer contribution is increasing from 3% to 3.5% from 1 April 2026 and then to 4% from 1 April 2028.
There is the ability for employees to apply for a temporary contribution rate reduction from the proposed rates back to the current default rate of 3%. These temporary rate reductions can be for a period of between 3 and 12 months with no limit on the number of rate reductions an employee is able to receive. The lower temporary rates are what the employer matches for the employer contribution.
Investment Boost allows a business to immediately deduct 20% of the cost of a new asset, on top of depreciation, meaning a much lower tax bill in the year of purchase. This could also give a boost to cashflow because it may decrease provisional tax payments required during the financial year.
For example, if you spent $50,000 on say a vehicle today, then $10,000 is immediately claimable in the 2025 / 2026 financial year plus depreciation at 30% on the balance of $40,000 for the next 11 months gives another $11,000 claim. This gives a total claimable of $21,000 in the first year compared to $13,750 which would normally be claimable.
Inland Revenue has been allocated more money to enable increased tax compliance and debt management activities. So, if you have debt with Inland Revenue then be warned as they may chase you for repayment, or if you think your returns ie. GST have been filed wrong then it is important that you contact us. Then arrangements can be made with IRD to repay the debt, or the errors can be fixed before IRD come looking.
