13 Jul 2010

$38 million tax impact announced by Telecom

10:51 am on 13 July 2010

Telecom says tax changes announced in the 2010 Budget will hit its profits by about 10% this financial year and increase its tax bill by $38 million.

In May, the Government cut the corporate tax rate by 2% to 28% and removed the ability to depreciate buildings for tax purposes.

Telecom says this will result in it paying $38 million more in tax in 2010, while its earnings this year are now expected to come in at the lower end of between $362 - $402 million.

It previously expected to earn between $400 - $440 million.

Telecom says legislation before Parliament, that is due to come into force next year, will also result in it paying a one-off tax charge of between $20 - $30 million in 2011.