Tax rejig looked at to encourage short term investment

Dr Cullen today welcomed the release of an issues paper inviting consultation on how to improve the tax rules on depreciation of assets.

Dr Cullen said he was concerned that current economic depreciation rates did not reflect " the reality of economic life in a time of rapidly advancing technology".

"If they do not, they may have a disincentive effect on the level of capital investment and may be biased in favour of long-term investments such as rental housing and against short-term investments such as high tech machinery."

He said it was important that investment decisions were not made for tax purposes.

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