1. INTRODUCTION AND SUMMARY

1.1 This submission on Question 12 of the Inland Revenue issues paper Taxation and the not-for-profit sector is made by The New Zealand Initiative (the Initiative), a Wellington-based think tank supported primarily by major New Zealand businesses. In combination, our members employ more than 150,000 people.

1.2 The Initiative undertakes research that contributes to developing sound public policies in New Zealand. We advocate for the creation of a competitive, open and dynamic economy and a free, prosperous, fair and cohesive society.

1.3 The Initiative’s members span the breadth of the New Zealand economy; independent, rigorous public policy research is crucial for effective governance and economic prosperity. The views expressed in this submission are those of the author rather than the New Zealand Initiative’s members.

1.4 The New Zealand Initiative strongly recommends retaining the income tax exemption for bodies promoting scientific or industrial research (Section CW 49) as it applies to independent public policy think tanks. The exemption is not a historical anachronism but remains vital to New Zealand’s policy development ecosystem.

1.5 This submission addresses Question 12 of the Issues Paper, which asks about the implications of removing or significantly reducing the exemption for bodies promoting scientific or industrial research.