Capital gains tax best, Endace co-founder

Last updated 08:40 13/12/2012

Relevant offers


British American Tobacco offers to buy Reynolds in US$47 billion deal Ikea NZ Facebook page set up: Is it finally coming to NZ? Auckland Council and contractors ordered to pay $120,000 to the family of killed rubbish truck worker 71yo asked to stand on hot water cylinder to plug in phone after bizarre UFB install Tuanz welcomes Vodafone offer to keep internet users connected The video that exposed Samsung's problems in China Mystery hotel brand to take over Old T&G building New Zealand's net migration back at record breaking levels at almost 70,000 SkyCity expects Crown Resort arrests to hit falling VIP gambling The psychology behind why that smashed avocado costs $22

Endace's "other" co-founder, Neil Richardson, says a broad- based capital gains tax would be the best way to ensure taxpayers got their cut when firms that received grants from the government were sold overseas.

Fellow co-founder Selwyn Pellett got in a Twitter stoush with Economic Development Minister Steven Joyce last week when he said he had "very mixed feelings" over the pending sale of the Waikato University spinoff to the United States' Emulex Corporation for £80 million (NZ$.

Pellett said it would have been better if the government had provided the millions of dollars of assistance it had given the company in the form of an investment rather than as grants.

Then taxpayers would have received a share of proceeds from the Emulex takeover.

Richardson said technology grants were a vital source of capital for high-growth businesses. He said he would be opposed to a move foreshadowed by Joyce last week to cut the size of grants to individual businesses and to instead spread them more widely to get more "leverage".

Joyce said the Government was reviewing the technology grant scheme and might move to a system of funding only 20 per cent of recipients' qualifying spending rather than 50 per cent, as now.

A capital gains tax would be a better option, Richardson said.

"It doesn't affect anyone acquiring a company or negotiating to buy one."

Such a tax should also apply to property so as not to skew the investment market, he said. He did not have a view as to what rate the tax should be set at.

"I have lived under the Australian capital gains tax regime and started businesses under that and found it fiscally logical, but I think you have got to look at the New Zealand context."

Richardson said he was the first to put money into Endace and remained its largest New Zealand shareholder with just under 7 per cent.Fairfax NZ

Ad Feedback



Special offers

Featured Promotions

Sponsored Content