For some years, small New Zealand businesses have been faced with bad regulations many have described as “jealousy taxes”. Top of the list for many is the disproportionate impost of the Fringe Benefit Tax (FBT).
Just as the government is attempting to free up business and stimulate activity, it persists in charging companies for taking clients to restaurants, cafes and bars where much business could be stimulated for both the venue and the SME. It is not only a blow to companies attempting to influence business activity, but also a swipe at the hospitality industry that, right now, is in desperate need of turnover.
While larger companies can afford to wine and dine their customers and woo clients with in house facilities, smaller companies without facilities are penalised for wanting to boost business by taking clients out to a café or restaurant.
Suspending FBT, which many politicians have probably forgotten exists, is something that right now the hospitality sector could benefit from. Not only has FBT impacted hospitality disproportionately over the years, wiping it would really give a shot in the arm to the sector.
Regenerating business in this country is key to the growth the government seeks and the wiping of taxes such as FBT that could really help the hospitality industry is a simple fix that would go a long way to driving business to a sector hit hard by COVID-19 lockdowns.
Regenerating businesses that, through no fault of their own, have been brought to their knees and are fast becoming unviable by the very response that COVID-19 demanded, need urgent action, creative thinking and longer-term solutions from their government.