Targeted tax cut seen as best way to promote capital investment
Both partial expensing and a company tax rate reduction would reduce the cost of capital on foreign investments. But cutting the company tax rate would have cost $10.8b over four years.
Capital investments, including new commercial buildings, can now get a 20% tax deduction in their first year.
Officials considered a company tax rate of 23% as they analysed the Budget policy aimed at boosting capital investment.
Last week, Finance Minister Nicola Willis announced the Boost Investment policy, under which businesses can deduct 20% of the cost of new machinery from their taxable income in the
