Employers and Manufactures’ Association

Matt Edwards, Chief Executive Officer, TMNZ

As we move into 2026, New Zealand businesses are anticipating a turning point after navigating challenging economic conditions. Business confidence has surged to its highest level in nearly twelve years¹, driven by aggressive central bank rate cuts and growing optimism about the recovery ahead. For business and tax advisors, this presents both opportunity and complexity.

At TMNZ, we’re seeing firsthand how evolving payment patterns are reshaping the way businesses manage their tax obligations, and we’re committed to supporting your clients’ growth throughout this pivotal year.

The Economic Landscape: Recovery with Caution

The New Zealand economy is projected to grow with real GDP expected to increase by 1.7% in 2025/26, rising to 3.4% in 2026/27², a welcome improvement after recent contraction. Business sentiment is notably strong, with manufacturers particularly optimistic about the year ahead.

However, the recovery is nuanced. While lower interest rates are providing relief to indebted businesses and the rural economy remains relatively robust, our urban centres continue to face headwinds. Unemployment is expected to peak around 5.5% in the March 2026 quarter, and inflation remains at the upper limit of the Reserve Bank’s target band. Core Crown tax revenue is forecast to rise as a share of GDP, from 27.3% in 2025/26 to 28.4% in 2029/30³, largely driven by an improvement in the economy and the effect of wage growth moving people into higher tax bands. At TMNZ we have seen significant, double-digit year on year growth in tax deposits made by small and medium sized businesses, indicating that some businesses are expecting to be more profitable this year.

For advisors, this environment demands careful cashflow management. The gap between economic optimism and actual financial performance means that while businesses may be planning expansion, they’re also managing tighter margins and delayed investment decisions.

Emerging Tax Payment Trends

We’re observing several significant shifts in how advisors manage their clients’ tax obligations in 2026:

1. Provisional tax calculation has become critical. In those industries that are struggling, many advisors are suggesting their clients to pay provisional tax based on actual cashflow rather than overpaying based on an uplift from the prior year liability.
2. Tax pooling is gaining traction. More businesses are turning to tax pooling arrangements to manage provisional tax more efficiently, reducing the risk of underpayment penalties while avoiding the opportunity cost of overpayment. Tax advisors are increasingly encouraging their clients to pay their provisional tax through TMNZ. This trend reflects a more sophisticated approach to working capital management as businesses seek every advantage during the recovery phase.
3. Tax payments are under scrutiny. With Inland Revenue’s increased focus on businesses with tax debt, advisors are setting up payment arrangements for provisional tax, while ensuring that clients’ GST and PAYE obligations are met by the due date.

How TMNZ’s Solutions Support Business Growth

At TMNZ, we recognise that effective tax payment management isn’t just about compliance – it’s about enabling growth for your clients. Our payment solutions are designed for the challenges businesses face in 2026:

• Flexible payment scheduling allows you to align your client’s tax payments with their actual cashflow patterns, particularly valuable when revenue remains uncertain. Rather than forcing provisional tax payments to fit rigid schedules, our payment solutions match to business rhythm.
• Integrated payment tracking provides real-time visibility across provisional tax obligations. For advisors managing multiple entities or complex group structures, this consolidated view eliminates the risk of missed deadlines and provides the data needed for strategic cashflow planning.
• Payment reliability matters more than ever. As your clients invest in growth initiatives, the last thing they need is a missed payment disrupting tax compliance or damaging their relationship with Inland Revenue.

Looking Ahead

The economic outlook for 2026 represents a genuine opportunity for New Zealand businesses. Capital investment is forecast to increase 6.1% in calendar 2026⁴, its strongest pace of expansion since 2021. This is the environment where strategic tax payment management transforms from a compliance function into a growth enabler.

For advisors, the message is clear: businesses that can efficiently manage their tax obligations while preserving working capital for investment will be best positioned to capitalise on the recovery. At TMNZ, we’re committed to providing the payment tools that makes this possible.

As we navigate 2026 together, I encourage you to review your current tax payment processes. Are they supporting your clients’ growth objectives, or are they simply maintaining compliance? The difference matters, and TMNZ is here to help you bridge that gap.

¹ New Zealand Institute of Economic Research (NZIER) Survey of Business Opinion, January 2026

² New Zealand Treasury Half Year Economic and Fiscal Update 2025

³ New Zealand Treasury Half Year Economic and Fiscal Update 2025

⁴ BNZ Economic Forecast for 2026

Summer’s here. A time for family, friends, and well-earned downtime. But for many small and medium-sized Kiwi businesses, it’s also one of the toughest periods for cashflow. The challenge is heightened for many sectors that experience a slow period in January and February, while provisional tax and GST payments are due on 15 January for businesses with a 31 March balance date.

This year brings additional pressure with the 2025/2026 Christmas and New Year public holidays falling midweek on Wednesdays and Thursdays. This creates a fragmented two-week period where many businesses will close or operate at reduced capacity.

Let’s look at why Christmas creates cashflow challenges and what options can help you navigate this seasonal period more smoothly.

Why Christmas creates cashflow challenges for NZ businesses

The period after Christmas is traditionally slow. For sectors like hospitality or retail, there’s a surge in demand before Christmas that makes the January drop-off particularly harsh.

Additional pressures businesses can come under include:

• business closures or reduced capacity over the break – less income generated
• employee incentive schemes and bonuses paid before Christmas – draining cash reserves right before the quiet period
• reduced consumer spending in January and February – as consumers apply more caution after the holiday spending surge
• inventory tied up in stock – particularly challenging for retail businesses with cash locked in unsold summer ranges
• slower bank processing times – public holidays and weekends can delay payments arriving in your account

Together, these create what many business owners know as the “summer squeeze” on cashflow, with added pressure to cash reserves with the 15 January provisional tax deadline.

The 15 January provisional tax deadline

With these seasonal challenges, it’s no surprise many businesses struggle to manage cashflow and meet the 15 January provisional tax deadline.

Unfortunately, Inland Revenue doesn’t factor in these seasonal challenges. They’ll charge 3.27% late payment penalties and 9.89% use of money interest (UOMI) if tax isn’t received on the due date (rates as at May 2025).

Many businesses find this timing particularly challenging given the seasonal slowdown and reduced cash reserves after the holiday period.

Ways to manage your Christmas cashflow

So what are your best options?

Many businesses take a proactive approach to their Christmas cashflow. Here are a few key areas to consider:

Accounts receivable – review outstanding invoices before the holiday period and follow up with customers to improve collection timing. Early December works well to encourage payment before businesses close for the break.

Supplier relationships – if you have good trading relationships and have been a reliable payer, consider discussing your payment schedules with suppliers over the seasonal period.

Planning ahead – create a cashflow forecast covering the December to February period. This helps identify potential gaps in advance, including reduced trading days, holiday bonuses, and the 15 January tax payment.

Every business situation is different. It’s worth discussing your specific circumstances with your accountant or financial adviser.

A smarter way to manage tax payments

Looking at your provisional tax payment timing? TMNZ offers a smarter alternative.

Tax pooling through TMNZ is approved by Inland Revenue and trusted by New Zealand businesses. It lets you defer provisional tax payments to a time that suits you, without incurring late payment penalties and UOMI.

It’s more affordable than many traditional forms of finance, doesn’t affect your existing credit facilities, and requires no credit checks or security.

You only pay back what you actually owe. If your tax liability is less than expected, you don’t need to repay the full amount. And the finance arrangement can be easily extended.

How it works

Say you need to defer a $5,000 provisional tax payment for 6 months. You’d pay TMNZ a one-off, tax-deductible interest amount, and we’d arrange the $5,000 provisional tax payment on your behalf.

The interest amount is based on the tax amount financed and the deferral period. In this instance, it would be roughly $130.

The provisional tax payment is held in an IRD account administered by Guardian Trust. They instruct IRD to transfer the tax into your IRD account when you repay the $5,000 principal in 6 months.

IRD treats the $5,000 provisional tax as paid on time once the transfer is processed. It’s that simple.

Key benefits of tax pooling:

• IRD-approved
• doesn’t impact your existing credit facilities
• no security or credit checks required
• flexibility to adjust if you owe less tax than expected

Planning ahead for the summer period

The businesses that navigate Christmas cashflow most successfully? They start planning early. Consider reviewing your cashflow position in October or November, before the holiday rush begins. This gives you time to understand your position and explore options that work for you.

Your accountant can help you assess your specific situation and what approaches might work for you, including whether tax pooling could be the right solution for managing your 15 January provisional tax obligations.

Take control of your summer cashflow

Christmas doesn’t have to be stressful for your cashflow. With forward planning and the right solutions, you can navigate the seasonal challenges while keeping your business on track.

Ready to ease your seasonal cashflow pressures? Learn more.

Need to calculate your provisional tax? Check out our Calculating Provisional tax guide.