Back to Making Tax Simpler
Benefits

Do you agree with these benefits?

Do you agree that

  • Greater convenience;
  • Greater speed and greater confidence;
  • Reduction of compliance effort;
  • Improved, more rapid and responsive customer services;
  • Reducing the cost of the tax administration system;
  • Improved delivery of services across government

could all result from the greater use of digital services in tax administration?

Comments

Catherine Field
In principal, I agree with any tax administration that would make it easier to manage cashflow and reduce tax compliance costs for small to medium size businesses. The current GST form is fantastic - simple to use and with information from the accounting packages, makes the process easy to manage. The current PAYE system of filing on-line is painful. Making PAYE filing easier would be a major plus. The question around Provisional Tax and calculating as you go like PAYE would also be a good thing. No matter how hard you try, you invariably get caught out at the end, and potentially get penalised. Sometimes you over-calculate and get very little back for over-paying. I also think that if technology is going to be used to improve the tax administration, the savings from this should be passed onto the tax-payer users. Those who don't want to adopt should not be getting any financial benefits in the savings.

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1 year ago
G Palmer
Obviously the scourge of provisional tax has always been unfair to contractors who have inconsistent income streams. It has stifled enterprise and sensible risk taking towards a better economy. To be rid of it is a dream. However, it must be simple enough for individuals to achieve in less than 1 hour and not require expensive accountant interactions.

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1 year ago
CathyB
Would love to see a better integrated service but am suspicious of promises to deliver a comprehensive internet based system cheaply and quickly - I have never seen this happen before. As a small business owner I do not want to have to invest in another accounting system just so it can talk to the IRDs one. I am happy with online filing.

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1 year ago
Patrick Duncan
I feel the main benefits for changes to the tax system are to reduce compliance effort and costs. The system itself feels convoluted. While converting the whole thing into a digitally accessible version might seem obvious, a multi-year review and build effort seems to have the scope to simplify to current rules.

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1 year ago
Simon N
My concern is that the proposed system would force people to use the online accounting systems like Xero or MYOB where your data is held by a commercial third party this introduces a commercial interest with little or no safeguards and forces the self employed to assume further costs. I think the linking to GST payments is a more satisfactory system.

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1 year ago
E. Cardellino
TOTALLY AGREE. I think the government is spying already enough on our transactions and thus working into the pockets of commercial parties, as well as reporting to Washington. I don't want to use Xero. NZ has apparently one of the most simplified tax systems in the developed world. For me adequacy is more important than simplicity and I am happy with the way the systems works now.

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1 year ago
Gareth
I agree, I would be worried that this move to digital will require an account with one of these online companies which is an additional cost. I am quite happy to retain my receipts and file electronically through the myIR portal - it's actually not that hard. Provisional tax is the pain.

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1 year ago
Tim Robinson
I estimate my tax liability and accumulate the money in a dedicated account. I get to keep the interest and I also feel safer having a bit of cash in hand. I can use that money as internal bridging finance. So I don't see any benefit in paying that money sooner.

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1 year ago
Peter McTaggart
Would like to see a monthly system introduced. We get unfairly penalised currently as the bulk of our takings are Dec Jan, Feb and March. Provisional tax is currently calculated for the whole year from the previous year divided by 3 and we currently have to pay penalties given our 1st provisional tax payment is based on the year divided 3 not the first 4 months of April May June. The penalty rate of 8% is out of line with the market

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1 year ago
David Sidebotham
I don't use electronic accounting software. I think regular tax payments rather than 6 monthly provisional tax is a good idea but the system needs to accomodate those simple souls who use a spreadsheet for their cash book.

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1 year ago
wendy
Another mischevious question designed to produce a particular outcome. Of course there will be benefits for some and a lot of difficulty and no benefit for others. It is disappointing that this survey is so slanted to obtain the outcome that the Tax Department wants. This is an example of a lack of honesty, fairness and transparency and not a great start to obtain a great new system that benefits everyone. What about PRIVACY, CHOICE, DATA PROTECTION and FAIRNESS?

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1 year ago
Kevin Prince
It should give those benefits, it should also mean that you can make a much more accurate assessment of what I owe you. Perhaps we could do Income tax the way we do GST, every couple of months and then adjust at year end either plus or minus when the accounts are sorted.

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1 year ago
Kevin Prince
It has to be accessible to all New Zealanders, no CAPTCHA, no requirement for a mouse and in line with Government Web Standards.

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1 year ago
maygray
what about controls? Government especially tax is known to overreach itself from time to time what are the tax payers rights protections from bad decisions and behavour of the tax department?

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1 year ago
Brian O
I applaud the further improvement and integration of taxing services online. Most of us have embraced internet services and smart phones and this technology is leading the way in which we all do business. IRD and us its clients can all benefit from better online service development. I look forward to seeing the Android App being released and hope that it will have practical functionality, like paying GST online. Perhaps the introduction of an ongoing online account readable via app or internet can allow multi-part-time-job earners to only have to pay a correctly adjusted rate of PAYE when they have several jobs, instead of the antiquated Secondary Job Tax system. I know many low income earners who have to work several jobs, who are penalised some of their vital cash flow because they have to pay Secondary Tax structuring. It then costs them more time & hassle to claim this back at the end of each year. With an app telling them their current earnings month by month, they could select a correct Taxation level when signing up for their second or third part time jobs. The most exciting news I have received by email from the IRD is the possibility of removing the Provisional Tax system - bring it on. With my 2 monthly GST returns (done online) it should be simple enough to devise some form of PAYE, with an adjustment at the end of the year to adjust for low income earners qualifiable rebates. Lets hope this all happens and soon.

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1 year ago
maygray
Controls on exercise of power by tax department ? Consumer /tax payer rights? Protections for consumers rights, privacy , data protection? Consequences if the tax department gets it wrong? User friendly complaints system? None of this is addressed so we cannot evaluate the claimed benefits?????

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1 year ago
Sharon Nolan
Providing it is easy to use and implemented after fully trialling first then I think it is a great idea. Too many Government initiatives are issued without adequate testing, consequently they contain frustrating 'bugs' that put users off using them.

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1 year ago
Rebecca Phillips
Can IRD please, please PLEASE trial all interfaces on typical end users - a diverse range of the financial administrators of the real world, as in ACTUAL users not IT people or managers. So often, these systems leave me speechless with how much they assume a (sometimes unqualified) end user already knows. Also ensure there is a dedicated team to help with the inevitable IT problems that will arise for some end users.

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1 year ago
Cameron Thorpe
I do agree that it would be beneficial, however as others have mentioned SECURITY must be a top priority. Also more options still need to be looked at given that if a business/individual for some reason had no access to the internet for a period of time or if a large group did it would have a dramatic effect. Ive noticed a lot of forms for example are only available to be filled out and sent online rather than downloaded and done via post.

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1 year ago
Lance
This is a great idea as my income can fluctuate quite drastically putting me out of step with provisional tax payments, Pay as you go is much better Lance

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1 year ago
Mike
I have a small business using low cost accounting software. I have no interest in using Xero or other cloud based systems that has functionality I don't need and the monthly charges that I also don't need. There are also security issues with cloud based systems that we all know about, nothing is secure in the cloud. If the new system requires new software and I need to purchase that, then there does not seem to be any advantage to me as I keep on top of tax obligations . Any new approach should not include additional costs for small business and charities. If security issues and software costs issues can be overcome (which means no additional cost for small business and charities) then I would be open to the concept provided is does work. Maybe the IRD could provide free software for small businesses if there are such obvious business and tax gathering benefits to the IRD.

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1 year ago
Heidi Munro
Well and truly overdue and yes yes yes if it makes life simpler!!!

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1 year ago
Catherine Orr
I use my mobile phone for banking, I'd use it for tax. I'm in favour of anything that makes it easier and cheaper to the IRD.

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1 year ago
Monique
Better digital access and the ability to do everything online, yes that is a great improvement. Automatic linking to accounting system is not great as security becomes a challenge as well as data integrity due to the different principles sued by companies/organisations with regards to checking of accounts, retrospective changes and accounting of general cost..

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1 year ago
malcolm wheeleer
Because my business is seasonal we spend half the year doing well and making a profit and a good part of the rest of the year running at a loss. I would need to have the -ve income tax on losses, refunded not go into a tax credit account. We would otherwise become severely cashflow critical.

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1 year ago
Dwayne
I can't see how more regular compliance could possibly reduce the compliance costs. Submitting a monthly or weekly update would involve the same amount of cross-checking and accounting work as doing the actual return. Just because an online system theoretically has data available before tax time doesn't mean that it has all been entered and checked for accuracy. When the IRD system doesn't take into account something that was temporarily missed, the business then has to either pay or spend time asking IRD for the provisional tax to be adjusted. Small businesses and sole traders do this sort of office work at home while they are not working if it can't be offloaded to family members, which means a short inefficient window during evenings/weekends/downtime and is unlikely to be as organised as an accountant might be at the same job. Expectations of regular updates would likely come with deadlines that simply mean unnecessary stress, or less time available for work.

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1 year ago
Anne Rogers
If it makes it easier for all parties, particularly the payers as we an integral part of the tax system it is good

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1 year ago
Mike H
I would like to see not just the Benefits but the Costs / "Downside" of the proposed changes. The IRD statements are biased towards Benefits. E.G: Do you agree that •Greater convenience; < may not be true, especially if digital use becomes compulsory for small business, sole traders. •Greater speed and greater confidence; < really ? Electronic storage is not foolproof and neither is it forever. Easy to loose data on computer systems. •Reduction of compliance effort; < maybe. Not proven. Last time this was attempted by IRD it made tax simpler for "standard" wage earners but did nothing for others. •Improved, more rapid and responsive customer services; < not proved. Just an "aspirational" statement. •Reducing the cost of the tax administration system; < really ? Prove it. Just another 'aspirational' statement. •Improved delivery of services across government. < Maybe. Maybe not. could all result from the greater use of digital services in tax administration? < Not proved.

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1 year ago
S Joy
I certainly agree that online filing and interaction, and a greater degree of digital integration would not only save money (how much does the IRD / customers pay in postage each year?) but also make the tax process and paper trail more streamlined and manageable for everyone. What I don't agree with is *forcing* anyone to use the online method. I think it's important that we recognize diversity in the ages and computer literacy of our taxpayers and business owners, and retain the opportunity for people to interact with the IRD via mail as always. If the online experience is truly easier, faster, more efficient, the majority of businesses and individuals will migrate to it anyway. Another consideration: I live rurally, and we don't actually have cell reception where we are - there are still a good number of kiwis who do not live within cell tower range. For that reason - PLEASE don't do what the majority of banks and other online apps do, and make a texted code the only way of re-verifying yourself after failed sign in, or confirming password changes etc. Especially when these codes normally expire in a couple of minutes (not long enough to race up the road waving a cellphone and trying to catch a signal....)

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1 year ago
Hanna Krause
I agree with the general tenor: if done well this could be great, but there's a danger of things going very wrong, if the system is rushed through or underfunded. My additional comment would be that good support when you introduce the system is vital. I run a very small business and do my own taxes and find that even the paper based system can be quite a jungle. If you say '43) Enter your Kauderwelsch from your calculation sheet here: ' You have to explain somewhere in plain English what that means, where I can find the calculation sheet and how to fill it in and if I call IRD for help I need to be able to reach a person who can answer my questions. A new more computer based system should also not require me to have to buy expensive accounting software.

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1 year ago
David Hooper
Great idea having things like interest and dividends prepopulating tax returns. Using payroll software to automatically file PAYE returns makes sense. Giving immigrants IRD numbers with their residency seems logical. Hopefully also included will be things like the GST status of properties , companies or individuals to help with GST compliance. Educating immigrants and migrants on tax consequences would be very helpful

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1 year ago
brian whetton
I agree with the change to digital technology but I am opposed to ENFORCEMENT of this system on folk who do not have the facilities. They (e.g. pensioners) should be encouraged & possibly subsidised to change but not FORCED - BIG BROTHER SYNDROME! The IRD should provide digital facilities @ IRD offices or through WINZ (or other Govt offices) for folk without digital technology to complete their returns with assistance. I would think that the overall number of folk in this category will be rather small compared to the total number of tax payers.

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1 year ago
Barry
Great in principle - we are a very small partnership that operates without accounting software - any system would need to work without forcing costs of software onto small businesses to comply; it would simply be unaffordable and discriminatory otherwise.

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1 year ago
Sarah Edmonson
Yes - I use IR's online services a lot. The more you can move online, the easier it is to keep up to date and check things when needed.

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1 year ago
Jim
I use Xero for my businesses, which produces GST Returns in almost the same format as the IRD. I could never understand why I then needed to fill in another form for submission to IRD. Integrating accounting systems with the IRD makes absolute sense, and would save me a lot of time and hassle.

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1 year ago
Christine Fraser
I do agree that the present system is very out of date. It takes an unfair advantage of using the business income well in advance of the payment due. We find this completely compromises our cash flow situation and look forward to doing something along the lines of the present online system for collection GST.

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1 year ago
John Jackson
Policy dictates business rules which dictate process all of which combine to provide outcomes such as enhanced customer experience, reduced administrative burden, etc. We must not let the tail wag the dog as was the case with NovoPay where several collective bargaining arrangements added complexity that proved too difficult to successfully deliver: we all know the story. The lesson is to keep the tax rules simple which reduces outcome risks and benefits everyone.

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1 year ago
Karen
I agree we need to look at the security as well, now everything is on line it could be easily hacked. I would hope that there is help for small business in this as the one man band operators seem to suffer with higher costs. I would hope that they look at other forms not just ipad, not everyone had ipads.

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1 year ago
Andy Bloomer
Virtually all my interactions with the IRD are on-line already. For example I get my GST reminders by email and I file my GST returns on line. I make payments by internet banking. My accountant sorts out my end of year returns and checks my GST returns at the same time, so I do not have a great deal of interaction with IRD. However, I have found the IRD website one of the easiest to use. It has plenty of explanation if I need it.

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1 year ago
Gareth
Not necessarily. It depends on what the resulting system looks like. If an unwieldy, overly complex, slow system which requires a lot of extra steps to (for example) lodge receipts or any other information that will remain paper based, then it will be worse and you will have none of these benefits. Ensuring that the compliance level is reduced is key to these benefits.

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1 year ago
Rebecca Phillips
Any changes and moves towards the perceived benefits have to take into account not just the average user but also the users such as the very small business and not-for-profits that may be currently operating perfectly adequately using a paper-based accounting system. Yes, it seems a bit backwards in these days of whiz bang technology BUT for the small operators it works perfectly well a lot of the time and they need to retain the option of still interacting with IRD in a more manual manner. Not all tax payers live with easy access to the internet either - we shouldn't force our big city mentality onto our rural counterparts who don't have UFB, or indeed ANY consistent internet access on their doorstep. Some serious thinking needs to be put into who these "non-average" taxpayers are, and what their needs might be.

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1 year ago
Phillip
As a Financial Officer for 4 NPO's I have found that we are being force down this road. It was easy to fill in a PAYE return or GST return and pop in the post now we have to sign up, logon etc etc. This move is really just moving more costs onto the client and away fro the Government Department. In Non Profits a change in committee means a change in ownership so more hours spent dealing with the consequences as no longer can they just sign a form, they have to be verified in the online system etc etc. The same is happening with the other departments in respect of grants etc.

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1 year ago
Mike Van Loon
as a computer programmer, who is currently developing an accounting package, I definitely think it is the way to go especially if it is built to be added to other software

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1 year ago
Peato Perez
I'm all for improving workflow but the biggest thing for me is security and access privileges. Access the information needs to be done securely and in a way where people-turned-ex partners cannot access another's information. That particular situation may come down to the individual foolishly sharing the information, but steps where social engineering cannot be done to access the information is important. Things like using an authenticator, for example, could be useful.

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1 year ago
Michael Moynihan
Pre-populating tax returns with interest on savings raises the question whether the existing exemption for amounts of less than $100 would remain in place. Setting up such a system creates a real temptation to garner tax on even trivial amounts of interest since the marginal cost of doing so is close to zero. It would be good to have some assurance that the existing bar would not get lowered.

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1 year ago
Rajeev
Yes

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1 year ago
Murray Friar
I agree with using more computer based services to interact with IRD. However, these computer services must have the same architecture as other government computer services. I have not got time to work out how to use a system every time I log into another government department. This commonality need to extend to a personal identifier. RealMe is a shambles. I now have three RealMe's. One for IRD and two more through the Companies Office for each company I administer.

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1 year ago
ROBERT DUGGIE
Prompt payment of Refunds would greatly enhance digital tax. The first year I used the online tax system my Refund was in my account in 48 hours. A first class result. In subsequent years it has taken around 4 weeks. I was given the exclaimation "the standard processing time for Income tax returns (IR3's) is 10 weeks" thus suggesting the 4 weeks was a good result. I believe Refund tax returns should be Processed as a priority before the system can be considered acceptable. 4 weeks for a refund takes the shine off of an otherwise admirable system.

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1 year ago
Aaron Tily
Of course I do. I use the internet more than I use the real world. Everything is done online these days and government agencies should put more thought into self service internet services for this century.

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1 year ago
Gina
Yes we should make the best use of technology possible, however, we still need to provide an option for people without access to technology or who are not able to use technology confidently.

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1 year ago
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