Govt plans tax credit for research and development

The government is planning to introduce a 12.5 percent tax credit for research and development by next year.

This is in line with the coalition agreement to increase spending on R&D by business.

Minister of Research, Science and Innovation Megan Woods made the announcement at the electronic manufacturing company Enatel in Christchurch this morning.

Dr Woods said it was a key lever in diversifying the economy and creating new industries with highly skilled jobs.

“This government is committed through our coalition agreement with New Zealand First to increasing business R&D expenditure to two percent of GDP over 10 years, and this consultation document is the first step we will take together in achieving this ambitious goal,” said Ms Woods.

New Zealand’s gross expenditure on research and devlopment is 1.28 per cent of GDP, which is lower than the OECD average of 2.38 per cent.

Ms Woods said a consultation document on the tax credit had been released.