Businesses breathe sigh of relief as CGT abandoned

The threat of capital gains tax has been holding Kiwi companies back.

That's the message from Business New Zealand.

It comes after the Government announced yesterday it's ditched a CGT because it doesn't have support from Winston Peters.

Many businesses have been fretting about the threat of a capital gains tax - worried they'd have to pay up on any capital if they sell.

“It would just ruin the motivation in young New Zealanders to just get out there and become business owners. there's just no incentive,” says hairdresser Kylie Galvin.

Now capital gains is out, businesses are in the clear.

"The reflections we've already had from businesses just in the last 24 hours has been one of great relief," says Kirk Hope of Business New Zealand.

There’s been 18 months of uncertainty around a capital gains tax, National says it's been an unnecessary waste of time and damaging to the economy.

Business New Zealand agrees it's had a serious impact on businesses.

"Well it's been a pretty significant anchor I think and now we're kind of free of that anchor, I think particularly from a business perspective we should see people at least being more confident about what their future looks like," says Mr Hope.

The Prime Minister won't acknowledge it's caused uncertainty.

“We've given a clear decision that there will be no capital gains tax and we've even given certainty beyond that - that I won't be campaigning and the Labour party won't campaign on capital gains tax,”says Jacinda Ardern.

Regardless, it's now off the table and won't be on Labour's agenda while Ms Ardern is in power. 

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It comes after the Government announced yesterday it’s ditched a CGT because it doesn’t have support from Winston Peters. Source: 1 NEWS