2 September 2004

Look what Labour's taxing now

The Labour Government's decision to slap a tax on new farm grass is another case of taxation running out of control, says National's Associate Revenue spokesperson, Brian Connell.

He is commenting on a decision by Inland Revenue to change the way it regards new grass laid down and the fertiliser used when a farmer converts his farm to dairying.

Instead of allowing the costs of grassing and fertilising to be expensed in the first year, it now wants all the costs of a conversion treated the same way - to be capitalised and then written off over the following years.

"Clearly, Michael Cullen is not satisfied with an accumulated tax increase of $34 billion since 1999 - an increase of 40% -- so he has now instructed the Inland Revenue vultures to tax farmers' grass," Mr Connell says.

"The cost of converting to dairy farming is expensive enough without this additional slug. Now, sowing new grass is to be treated as capital.

"Rather than considering methods of reducing tax, the greedy Labour Government has its claw out again.

"How many more tax promises can this Government break? So far it's 24, but this one must be the most bizarre," Mr Connell says.

ENDS

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