Key Budget 2025 Announcements – What Businesses Need to Know

The Government’s 2025 Budget introduces several changes that may impact your business planning and obligations. Below is a summary of the key updates relevant to businesses:

1. Business Asset Deductions

   • New 20% Immediate Deduction: Businesses can now claim an immediate deduction of 20% on the cost of eligible new assets (excluding land, residential buildings, and second-hand assets). The remaining 80% continues to be depreciated over time, as usual.

     
     

2. KiwiSaver Changes

   • Government Contributions Reduced: From 1 April 2025, the Government’s KiwiSaver contribution will reduce to 25 cents per dollar contributed, with a maximum of $261 per year.

   • Increased Contribution Rates: Minimum contribution rates for both employers and employees will increase to:

     • 3.5% from April 2026

     • 4% from April 2028

   • High-Income Phase-Out: Individuals earning over $180,000 per year will no longer be eligible for the Government’s KiwiSaver contributions.

     
     

3. Inland Revenue Compliance

   • An additional $35 million has been allocated to Inland Revenue to enhance compliance and collection enforcement, which may result in increased scrutiny of tax obligations.

     
     

4. Digital Services Tax Scrapped

   • The proposed Digital Services Tax Bill has been withdrawn, avoiding potential trade tensions—particularly with the United States.

     
     

5. New Investment Agency

   • Invest New Zealand has been established to attract overseas investment and improve capital flow into key industries across New Zealand.

     
     

For more information, click here: Budget at a Glance 2025 | The Treasury New Zealand