GST expert sounds warning about Labour's tax plan

A tax expert warns that Labour's proposal to increase the threshold for GST registration could come with its own problems.

On Thursday, Labour leader Chris Hipkins said it would introduce changes designed to help small businesses , if it were in government after the coming election.

Big businesses would have to pay small suppliers within 15 days on invoices of $25,000 or less, and publish how quickly they paid suppliers.

The asset write-off limit would be lifted from $1000 to $10,000 for businesses with turnover of less than $10 million, so small businesses could deduct the cost of equipment from their tax bill.

It would also raise the GST registration threshold from $60,000 to $80,000, which would mean about 35,000 operators would not have to register for GST, when they would have had to at the current level.