The Budget includes big tax breaks for the gaming industry.
The Government says gaming is a low emissions, high wage business, but the move also follows lobbying from the industry itself about tax breaks across the Tasman giving the industry an advantage in Australia.
The plan is to give a 20% tax rebate for game development which meets the minimum expenditure threshold of $250,000 a year. This rebate will be able to reach a total of up to $3 million per year per studio, and it will be backdated to 1 April.
The plan was announced by the Minister for the Digital Economy and Communications Ginny Anderson, and the Minister for Economic Development, Barbara Edmonds.
“We know from looking at advanced economies like Germany, South Korea, Japan and Singapore that the best investments you can make in the future of your economy are in science, skills and infrastructure,” Anderson says.
She says the gaming sector contributed $7 billion towards New Zealand’s Gross Domestic Product (GDP) in 2021 and says the industry has been growing at twice the rate of overall growth since 2016.
In addition to the gaming rebate, the Government is investing $27 million in a digital skills package to help grow the tech sector workforce, by helping to cover the cost of new employees. It will also integrate with school learning programmes.
The total allocation for the tax rebates is $160 million over four years. The allocation for the extra training is $26.6 million over four years.
6 Comments
A tax break is different from a subsidy. Not taking someone's money away is very different to taxing others and giving them that money...
As the article stated this is to keep the taxation of gaming companies in NZ competitive with Australia (https://www.ato.gov.au/General/New-legislation/In-detail/Direct-taxes/I….)
Not sure how I think about this overall but as a response to Australia's actions the NZ govts hand was somewhat forced here. There are lots of positives externalities to the tech ecosystem in NZ to having a strong gaming industry as well so not the worst decision in context.
Meh.
Gaming industry is growing at double the rate of GDP as it is. Without this it will continue to grow fast, though perhaps slightly slower as some seeps away to Australia.
If you don't like Australia engaging in inefficient spending that negatively impacts you then have a discussion about it. Racing to the bottom is a terrible idea.
Simply giving this to NZ Super fund would produce 9x return on the dollar vs here increasing aggregate living standards and lowering aggregate tax bills
From a fiscal perspective, a subsidy and a tax rebate of the same size have the same impact on the crown's books. Of which 1/5,000,000th is mine. My annoyance is based mainly on the incredibly low value for money this will provide compared to what other options the government has to spend money on.
The bigger question is why there is a minimum corporate spend to qualify! Surely the smaller the company the more it requires the support to grow!!!!
Obviously this is designed to help the biggest boys in the industry get ahead of the smaller startup outfits. Totally unfair and not truly designed to let the homegrown industry compete as a whole. Typical elite mates helping elite mates as usual.
Yet another race to the bottom. Any industry that could possibly operate in another country, which is most industries i would have thought, can now say hey give me a tax break because over here they are giving one.
Stuff corporates, how about me? Give me a tax break or i'll move to Singapore where the top tax rate is 24% (if you are lucky enough to earn over a mill).
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