Closed-door tax policy hurting NZ

Monday 1 November 2004

Large international private equity funds want to invest in New Zealand's budding venture capital industry, but are being deterred by this country's tax laws.

By The Landlord

Franceska Banga, general manager of the government's $100 million Venture Investment Fund (VIF), said the views of overseas fund managers were remarkably consistent and showed that the tax reform under way did not go far enough.

Banga surveyed 15 "top-tier fund of funds managers" and included responses in her submission to the parliamentary committee considering the Taxation Bill 2004.

The legislation is designed to align New Zealand's venture-capital tax rules with Australia's, but the industry fears it will leave significant disparities in place.

The VIF's fund manager, New Zealand venture capitalist Neville Jordan of Endeavour Capital, said that the way our tax status stands today, many overseas fund managers could be at a tax disadvantage if they chose to invest in New Zealand, rather than the US or Australia.

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