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Speaker 1: A little bit of movement in the tax treatment or

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Speaker 1: treatment of tax. These are changes to the Foreign Investment

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Speaker 1: Fund rules. Now the idea is it encourages migrants to

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Speaker 1: stay in the country. A double tax is a real

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Speaker 1: concern apparently for many wanting to move here, not only

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Speaker 1: migrants but expats as well. Essentially, it's about paying tax

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Speaker 1: on investments when the gains are realized. Now the Revenue Minister,

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Speaker 1: Simon Watson's with us. Simon, very good morning.

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Speaker 2: To you morning.

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Speaker 1: Are you part of this big investment welcome to the

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Speaker 1: world thing over the next couple of days.

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Speaker 2: I am. I'm actually in the beehive at the moment,

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Speaker 2: but I'm heading there this evening to do some talks

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Speaker 2: tomorrow with energy investors.

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Speaker 1: Fantastic. So this treatment without getting too high for looting

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Speaker 1: about it, and this is mainly aimed at tex at tech.

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Speaker 1: Has this been on your radar for a while? Is

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Speaker 1: this a major issue or not?

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Speaker 2: Yeah, it has, It's been on the radar. I've heard

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Speaker 2: it clearly pretty much as I came in as Revenue Minister.

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Speaker 2: The Zilland's one of the only countries in the world

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Speaker 2: taxes these foreign investments based on assumed earnings. I guess

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Speaker 2: you could say paper earnings versus actual real ones. And

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Speaker 2: this system hits migrants, particularly returning kiwis, and those that

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Speaker 2: are wealthy unfairly, especially those in the tech and startup

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Speaker 2: and you know, we've made some changes to fix that system,

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Speaker 2: and we've been getting some pretty good feedback around that good.

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Speaker 1: So an example would be I invest in the company,

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Speaker 1: its value starts to rocket, I'm not it may well

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Speaker 1: be still losing money. I'm not getting anything back, but

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Speaker 1: you were still taxing me on that.

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Speaker 2: It's right, in effect, taxing you on the paper profit,

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Speaker 2: but you haven't got any cash to be able to

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Speaker 2: pay that tax bill until you actually sell the business

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Speaker 2: or realize that that's not obviously going to be that helpful.

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Speaker 2: And we've made changes to allow you to wait until

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Speaker 2: you actually make that sale before you pay that tax.

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Speaker 2: And it's quite a simple change in what is a

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Speaker 2: complex area. But you know, what we do know is

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Speaker 2: that for wealthy returning kiwis, a lot of them go

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Speaker 2: to Silicon Valley or wherever they go and start a

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Speaker 2: business overseas. They make a bit of money, but this

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Speaker 2: is one of those barriers, and you know, it's not

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Speaker 2: going to solve the world, but it is actually going

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Speaker 2: to make it easier for those returning Keys and migrants

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Speaker 2: to go, Hey, you know, I'm going to go back

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Speaker 2: to New Zealand and set up life here, and every

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Speaker 2: one of those people that comes back here is going

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Speaker 2: to pay tax, and that's more than what we have today.

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Speaker 2: So from our point of view, you know.

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Speaker 1: There's upside any sense of the split, how much of

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Speaker 1: it's about expats versus new migrants, and the migrants actually

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Speaker 1: once they land here staying here.

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Speaker 2: It's pretty hard to quantify. But from our point of view,

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Speaker 2: we just want to move any of the barriers that

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Speaker 2: are stopping these people either coming home or wanting to

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Speaker 2: choose New Zealand as a place to invest and do business.

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Speaker 2: So from our point of view, you know, we're not

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Speaker 2: either either does well for us. But you know, we

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Speaker 2: had a pro system that was broken and we've taken

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Speaker 2: the action to fix it, and you know, I think

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Speaker 2: that's going to be good.

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Speaker 1: So when you say you've taken the extra thing, this

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Speaker 1: goes back to when in twenty four was at April

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Speaker 1: twenty four.

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Speaker 2: It's actually going to be put through in the tax bill,

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Speaker 2: but it goes We've done it retrospectively, so from the

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Speaker 2: first of April twenty twenty four this will come into play,

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Speaker 2: so stick of certainty to investors right now knowing, Okay,

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Speaker 2: well I know how this is going to work. That's

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Speaker 2: an upside for me, and I'm going to you.

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Speaker 1: Know the other thing, of course, when you get migrants

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Speaker 1: in the country they want to buy a house, when

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Speaker 1: are you going to move on that and let them

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Speaker 1: buy a house?

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Speaker 2: Well, that's not under my portfolio, Mike, as you know,

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Speaker 2: but I'm sure other people are considering that at the

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Speaker 2: moment that I don't have any update on that.

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Speaker 1: Good on your nice and talk. Do you appreciate it

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Speaker 1: very much? Simon, What's revenue Minister?

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Speaker 2: For more from the Mic Asking Breakfast, listen live to

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Speaker 2: news talks that'd be from six am weekdays, or follow

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