Proposal to boost research and development via tax credits

Proposal to boost research and development via tax credits

A proposal to boost research and development via the introduction of tax incentives is part of a much-needed discussion on how best to apply settings for innovation.

The government has released a discussion document which proposes a 12.5% tax credit on eligible expenditure for businesses conducting research and development in New Zealand.

"Support and encouragement for businesses to invest in innovation is a vital strand to growing our economy," says Kim Campbell, CEO, EMA.

"Businesses have to be able to meet the growing demands of their particular customers and they need to be agile to remain competitive. Research and development is crucial to how they evolve and innovate to achieve this.

The proposal is suggesting that tax credits are used in tandem with a research and development grants system.

"In previous surveys we have conducted, members have been relatively evenly split between using grants or tax credits. I think the proposal to have both is worthy of discussion and we encourage business to engage in this debate," says Mr Campbell.

"Our aim will be to have a system which is practical for businesses to implement and delivers the desired outcome to grow research and development as a percentage of gross domestic product."

ENDS

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