About 143,000 families will receive weekly financial support through an in-work tax credit increase
Parliament has passed a bill amending the Taxation (Annual Rates 2025-26, Compliance Simplification, and Remedial Measures) Bill to support families through rising fuel prices resulting from the conflict in the Middle East.
The bill passed its final reading yesterday 26 March, according to revenue minister Simon Watts. Effective 7 April, approximately 143,000 working families with children will receive an additional $50 per week via an in-work tax credit increase; another 14,000 working families will be given a smaller payout.
“The conflict in the Middle East is directly resulting in higher prices at the pump, putting additional pressure on Kiwi households”, Watts said. “This support is carefully targeted at families in the squeezed middle – parents who are working hard, not eligible for main benefits, and raising kids on modest household incomes”.
Moreover, the bill contains measures eliminating tax barriers to facilitate greater investment and talent influx.
“We have revised the thin capitalisation rules to make New Zealand more attractive to overseas investors, especially for infrastructure projects”, Watts said. “Thin capitalisation rules limit deductions for debt that foreign investors can claim on their New Zealand investments. These rules prevent income being shifted offshore and protects our tax base. But these rules can sometimes go too far and discourage investment, particularly for the capital-intensive infrastructure projects that are typically funded by large amounts of debt”.
He explained that the reforms ensure that the rules “strike the right balance”.
Other measures introduced by the bill to drive talent attraction and retention include permitting new migrants and returning Kiwis to apply a new taxation method taxing realised returns instead of estimated gains. Moreover, flexibility on tax payment schedules has been enhanced through changes in the rules for employee share schemes.
Digital nomads may also remain in New Zealand for a lengthened period before being taxed.
