Racing Minister, Winston Peters has announced the Government is preparing public consultation on GST policy proposals which would make the New Zealand racing industry more competitive.
“The racing industry makes an important economic contribution. New Zealand thoroughbreds are in demand overseas as racehorses and for breeding. The domestic thoroughbred industry put nearly a billion dollars into the economy in 2022/23,” Mr Peters says.
Bloodstock breeders often join together in a joint venture when investing in a thoroughbred, helping with the initial purchase price and ongoing costs.
Mr Peters says common practice amongst joint ventures including bloodstock breeders is to individually claim GST deductions in their own GST returns. Inland Revenue has however recently concluded that the current rules do not allow this.
“To comply with this, breeders would incur the compliance cost of registering and filing GST returns for each horse separately every month or every two months,” Peters said.
“The Government is proposing to take a pragmatic approach and avoid imposing compliance costs by allowing current practice.
“If this proposal proceeds, it will place the New Zealand industry on a more equal footing with the Australian industry.”
The consultation document is expected to be published in the coming months on taxpolicy.ird.govt.nz.
Mr Peters also congratulated New Zealand Bloodstock on the just-completed 99th National Yearling Sales at Karaka, with combined sales of $86m.
A highlight was the record $2.4m paid for a sibling by Savabeel to star mare Orchestral – the highest price ever paid for a filly sold in New Zealand.
“The sales show the New Zealand bloodstock industry is in good health and the industry presents major potential for growth both domestically and through international interest,” Peters said.