Mr. Brownstone
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Rating Guru
Dividend payout doesnβt impact the tax a company pays beyond its impact on net debt & the subsequent higher interest expense.Company profits can be 50% or 0%, they are relatively irrelevant.
All profits either get paid to shareholders (and taxes at their rate) or reinvested back into the business generating more tax in the future.
Therefore isnβt it better to be as low as possible to encourage reinvestment as the tax gets captured via shareholders if not.
The fact a company is owned by NZ shareholders or overseas is more an issue, but it shouldnβt dictate tax policy. That should be addressed by increasing NZer savings (eg increasing kiwisaver contributions)

