Minister for Small Business and Revenue Stuart Nash yesterday confirmed changes to tax rules which included making "feasibility" costs of up to $10,000 tax deductible from next year.
The tax write-off could be spread over as long as five years.
Another tweak to small business taxes could allow start-ups to continue attracting investment while also claiming the tax benefits of early losses.
Companies are not able to offset losses if the shareholding structure of the business changes, often a key way in which start-ups raise funds.
Mr Nash said this change would be subject to further consultation with business and tax experts, expected later this year.
The tax updates were announced as part of the Government's economic plan released yesterday and are in line with the recommendations of the tax working group in its final report earlier this year.
Otago Chamber of Commerce chief executive Dougal McGowan said the focus on reducing costs for small to medium-sized businesses would be welcomed by most and could provide kick-starts to the rapidly growing start-up sector, where cashflow and funding were always issues.
However, he said implementation needed to be easy to understand and access or there will be "little or no uptake".
"It will be great during the consultation period later this year to understand more of the detail that sits behind the two proposals and how they would work from a business planning perspective."
He said it was also hoped that the Government would be taking a look at other compliance costs throughout the sector.
Other initiatives in the plan include a $1billion investment for research and development tax incentives, investment in transport, boosts to apprenticeships and trades training and changes to immigration.
