Government drives $2 billion of business research and development
Published: 31 May 2023
The Government’s research and development tax incentive (RDTI) has supported more than $2 billion of New Zealand business innovation – an increase of around $1 billion in less than 9 months.
Business expenditure on research and development makes up about 60% of national spend. The RDTI is therefore a flagship initiative to realise the Government’s goal of raising national research and development expenditure to 2% of gross domestic product.
The RDTI provides a 15% tax credit for businesses performing eligible research and development activities in New Zealand. RDTI uptake is growing steadily as businesses invest in the research and development needed to fuel innovation and boost our economy.
To date, the Government has provided in excess of $312 million tax credits through the scheme.
As more businesses become aware of the RDTI and see the benefits it can provide beyond their bottom line, business research and development in New Zealand looks to continue to increase in size, scope and quality. This is a positive sign for the wider research, science and innovation system, which is undergoing its largest reforms in 30 years through the Te Ara Paerangi – Future Pathways programme.
To make the scheme more accessible and attractive, in-year payments have been introduced to allow businesses to receive regular payments throughout the year, rather than having to wait for the money to be paid out after the end of the tax year.
The in-year payment scheme is a world first and enables small businesses and start-ups to better manage their cashflow.
Learn more about the RDTI on the Inland Revenue Department’s (IRD) website:
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