2: Quantified Tax Expenditures and Spending through the Tax System Quantified tax expenditures Value of expenditure 2012/13 (actual) Value of expenditure 2013/14 (actual) Value of expenditure 2014/15 of expenditure 2015/16 Value of expenditure 2016/17 of expenditure 2017/18 (forecast) As at April 2018 Estimated Actual As at April 2018 Estimated Actual As at 2018 Estimated Actual Charitable or other public benefit gifts by a company: deduction 20 17 30 30 27 27 12 15 15 Charitable or other public benefits: tax credit 228 239 248 248 252 254 246 258 258 Independent earner tax credit 224 226 224 226 221 226 215 226 226 Authorities: donations 0.7 0.9 4.8 4.8 3.7 3.7 1.7 1.7 1.7 Note: measured in $000,000s over March tax years. Italicised values may be incomplete. See the appendix for further information on quantification methods. Appropriated spending through the tax system Value of expenditure 2012/13 (actual) Value of expenditure 2013/14 (actual) Value of expenditure 2014/15 (actual) Value of expenditure 2015/16 (actual) of expenditure 2016/17 (actual) Value of expenditure 2017/18 (forecast) Child tax credit 1.7 1.8 1.3 1.1 0.9 0.8 Family tax credit 2,060 2,015 2,006 1,793 1,723 1,696 In-work tax credit 545 533 511 513 548 532 KiwiSaver tax credit 723 804 855 698 743 830 Parental tax credit 17 18 21 31 30 29 Minimum Family tax credit 12 14 16 14 13 12 Best tax credit - - - - - - Note: These credits are appropriated and are measured in $000,000s over fiscal years.
Independent earner: tax credit Section LC 13 -Tax Credit Individuals whose income is between $24,000 and $44,000, and who are not receiving certain forms of income, are entitled to a tax credit of $520. This credit abates once annual income rises above $44,000. To improve incentives to participate in the workforce.   Interest on home vendor mortgages: tax credit Sections LZ 6-8 -Tax Credit A tax credit may be available for interest from a home vendor mortgage, providing it was approved by the Housing NZ Corporation, on or before 5 August 1982. To encourage the most efficient use of the nation’s housing.    Jurors’ and witnesses’ fees: exempt income Section CW 26 -Exemption Fees paid by the Crown to jurors and its witnesses, other than expert witnesses, are exempt income. To encourage public involvement in law enforcement by increasing the net payment to witnesses. Cost savings for the Department of Justice who administer the payments, which outweigh the tax foregone.   Local and regional promotional bodies: exempt income Section CW 40 -Exemption The income derived by a charitable association or society is exempt income, if it is primarily established for beautification purposes. To encourage and regional beautification/advertisement.   Māori Authorities: deduction Section DV 12 -Deduction A Māori authority is allowed a deduction for a cash donation that it makes to a Māori association as defined in the Māori Community Development Act 1962. It is also allowed a deduction for charitable or other public benefit cash gifts. This deduction is limited by net income. Tax incentives for charitable donation.   Non-profit organisations Section DV 8 -Deduction Non-profit organisations are entitled to an income tax deduction for the lesser of $1,000 and their net income. To reduce compliance costs.   Non-resident oil rig and seismic vessel operator - tax exemption Section CW 57 -Exemption Income derived by non-resident operators of oil rigs and seismic vessels is exempt from taxation. To prevent rig operators leaving NZ before 183 days and a separate operator having to come in to finish the job.  
Payments of interest post-war credits: exempt income Section CW 5 -Exemption Interest derived by a person section 2 of the Income Tax (Repayment of Post-War Credits) Act 1959 of the United Kingdom Parliament is exempt income. To reduce compliance costs, as interest on post-war credits was already exempt from tax in the UK.   Payments of interest on farm mortgages: exempt income Section CW 6 -Exemption 50 percent of the interest that an individual derives from a mortgage securing a loan made by a seller of a farm is exempt income, if the Rural Banking and Finance Corporation of New Zealand approves the mortgage. To encourage farmers.   Petroleum mining expenditure: accelerated deduction Subpart DT, sections EJ 12-20 -Deduction Development expenditure is written off over an accelerated seven-year period. To make the NZ mining industry more competitive internationally (and similar to the rules in Australia)   Plain clothes allowances Section CW 17CC -Exemption In very limited circumstances a clothes allowance paid to an employee who is also provided with a uniform can be tax exempt. To reduce compliance costs.   Research and Development – cashing out tax losses Subpart MX -Cash-out of losses In qualifying circumstances a company that conducts research and development and incurs tax losses may cash out the tax of the research and development part of the tax losses. This is repayable against future profits, or in certain other circumstances. To reduce bias against investment in R&D start-ups arising from the current treatment of tax losses.   Scholarships and bursaries: exempt income Section CW 36 -Exemption Any scholarship or bursary payment for attendance at an educational institution is exempt income, except for a grant or an independent circumstances grant under the Education Act 1989. To assist education development.   TAB and racing exempt income Section CW 47 -Exemption Income derived by the New Zealand Racing New Zealand Thoroughbred Racing, Harness Racing New Zealand and the New Zealand Greyhound Racing Association is exempt income. Note that betting turnover is separately taxed. To reduce administrative costs owing to the small amount of receipts.  