Back to Making Tax Simpler
Principles

Do you think there are any other principles which should guide the development of digital services?

Apart from the principles stated below, do you think there are any other principles which ought to be taken into account?

First, the overarching principle is that services must be designed for the customer. Each of the following principles addresses a different aspect of this overriding principle.

  • Principle 1: no one size fits all.
  • Principle 2: tax compliance and access to entitlements are critical.
  • Principle 3: change will not be imposed without careful consideration of the costs and benefits.

Comments

PukekoBiz
Principle 4: Privacy/ ownership will be acknowledged. Data exchange between government or even 3rd party institutions are not allowed respectively only after permission has been granted. Principle 5: My bank account and salary is mine. Without court order nobody is allowed to just withhold/ withdraw money from it.

Do you agree with this comment?

  • agree20
  • disagree3
1 year ago
Rhys Goodwin
A great thing you're embarking on here but PLEASE have you project managers, sponsors and directors read this New Zealand book: Software Project Secrets: Why Software Projects Fail You can do it! All the best!

Do you agree with this comment?

  • agree7
  • disagree3
1 year ago
George Spark
This kind of electronic "improvement" can be a double-edged sword. In recent years, some elements of the NZ tax system have clearly changed towards a one-sided benefit for the government in what I would call an unfair way. Case in point is tax residency, which has changed so that people can be hit with NZ tax even if they live overseas full time, simply because they have family in NZ and similar "vague" reasons. Yet when someone lives overseas full-time they don't benefit from their tax payments in any way. So this is a first step towards state totalitarianism in a sense (the State assumes control because it can, not because it is fair; effectively abuse of power). Governments always seek to increase their power, and given the unfairness of the tax residency change (which is just one example I happen to have come across), I'm not sure we can trust the government to be fair. Based on the precedent above, it is perhaps more likely that this exercise will become another power grab by the government, whilst it is being sold to the public as a matter of increased convenience. So if this is not just another way to increase government power over the citizenry, this should be made very clear in the way the changes are eventually concluded and implemented. "Have your say" efforts such as this one are nice, but they can also be used as a smokescreen. Hopefully this comment will be published (to prove we can have "healthy debate"), and the end result will be truly better for both sides, not just for the government with a few superficial improvements for the public at large.

Do you agree with this comment?

  • agree11
  • disagree6
1 year ago
Toni
Completely agree George Spark

Do you agree with this comment?

  • agree1
  • disagree0
1 year ago
Kevin
Principle 4: The benefits in Principle 3 should be measured in terms of benefits to the tax payer not the IRD!

Do you agree with this comment?

  • agree15
  • disagree1
1 year ago
L Gaugau
Agree with you Kevin, which is why for DIGI-Biz (businesses) & DIGI-Customers (Joe Bloggs) will benefit more than traditional paper customers in the end. One size fits all must steer all DIGI-Biz/Customers in the same direction and send out the same message. Too many options leads to confusion, at least then when the transition comes about, everyone knows what benefits them, how they make the transition and a whole country to ask "how do I go DIGI-Biz/Customer?" ... in terms of providing benefits to DIGI-Biz/Customers.

Do you agree with this comment?

  • agree0
  • disagree2
1 year ago
DigitalFirmServices
Principle 4: Close cooperation, consultations and possible accreditation of the third party products which deliver services in accordance with set-up by IRD requirements and specifications.

Do you agree with this comment?

  • agree4
  • disagree1
1 year ago
Steve
The IRD should encourage the self employed to use Tax Agents / Chartered Accountants. Possibly even incentivising this. Modern tax agents already use state of the art digital systems and use software to interface with the IRD. In my experience the appalling non compliance and errors are from the do it your selfers

Do you agree with this comment?

  • agree5
  • disagree13
1 year ago
Paul Hickson
Make sure you have a reliable and speedy internet network before you make it compulsory. In the area I come from, Te Puke, cellphone and internet coverage is poor. We have the dopey situation of fibre going past homes and offices up to schools which we cannot connect to. Meanwhile once the school children are home from schools or have holidays our copper broadband slows down and often disconnects. Generally IRD internet based systems I find work well but the supporting infrastructure is the problem. Fix this first.

Do you agree with this comment?

  • agree15
  • disagree2
1 year ago
Philip
It would be helpful but our accountant already looks after our filing etc. One concern with IRD working out tax liability would be how will they allow for depreciation. Also if payments were to be made to IRD on the 21st of the month, not 20th it would assist with cash flow as many payments are made on 20th of the month, but the bank does not recognise these for payment purposes until the 21st

Do you agree with this comment?

  • agree1
  • disagree2
1 year ago
Bernie Gunn
Anything that makes business/personal income tax simpler will free up new business owners to do what matters to their business. Doing gst online especially with accounting software I find very simple so doing income tax as we go along would be so much simpler and would be a joy to pay.

Do you agree with this comment?

  • agree2
  • disagree2
1 year ago
rhys williams
I think the idea could work if a system was formulated so you could mayby pay prov tax on our gst returns each 2 months with a catch up or refund at the end of each financial year? regards Rhys

Do you agree with this comment?

  • agree3
  • disagree2
1 year ago
Toni New
The principles are a good overview to a system that could indeed progress IRD services and are a necessity to supporting individuals and business and the current system is prehistoric and needs a good overhaul.!!!

Do you agree with this comment?

  • agree2
  • disagree1
1 year ago
Katie
Principle 4: Compliance and correct payment must be as easy and flexible as possible for small and startup businesses. Reason being that this group struggles with compliance and is of great benefit to the economy. Making compliance easier without over-burdening means we all get the benefit of their growth and contribution.

Do you agree with this comment?

  • agree3
  • disagree2
1 year ago
Trevor Wisenberg
With any digital service comes the potential for hacking. Linkage of tax with account will render both vulnerable and any transactions or information related to both. How secure will such a system be?

Do you agree with this comment?

  • agree4
  • disagree0
1 year ago
Dennis Thomsen
I started employing around 1980. At that time it was pretty simple, work out gross pay, look up the tax table basically done, send IRD a cheque (in a post paid envelope). Now I also have to do Kiwi saver, student loans Employers Kiwi, Collect Court debts, collect IRD debts, Collect GST. I am constantly having to read material from IRD, and the on line system is rubbish. If I am late with anything or stuff up I get fined. If IRD stuff up I spend considerable time sorting it. I haven't got or work where there is a landline and they don't accept 0800 calls from mobile phones (right up with the play is IRD). I act as a collection agent for the Government, I do it for free, I get penalised if I get it wrong. Both the United Nations and the NZ Bill of human rights say Slavery is very bad, what else is this. The least IRD can do is come up with a user friendly cost/time effective system with properly trained staff who get it right.

Do you agree with this comment?

  • agree6
  • disagree1
1 year ago
John bolt
Can you please simplify the employer contribution to kiwisaver. I don't see why we can't just make the gross payment and then electronically the ird can just deduct the ecst amount. The easier you make these things the more likely we are to recommend it to employees.

Do you agree with this comment?

  • agree3
  • disagree2
1 year ago
Stuart Brown
One of the most confusing taxation areas for farmers is capital livestock tax. Firstly why pay tax on unrealised income? Secondly the fluctuations place an unnecessary complication on farm management (particularly for sheep and beef farmers) which is difficult to plan for enough given seasonal and market fluctuations. And thirdly it makes accounting unnecessarily complicated and thus expensive. I think it should be abandoned. Tax would be paid when stock is sold, and costs claimed when they purchased, just as it is with GST.

Do you agree with this comment?

  • agree2
  • disagree1
1 year ago
dave goad
Moving from estimating provisional tax based on last year to a PAYE system IS NOT SIMPLER - basing on last years income requires zero effort as I've already filed the return. So for those of us who don't use an accounting package that would do this automatically (and thus be as simple as my current method) filing returns / providing info in real time would be more work. Plus I would hope I tend to make more money (and pay more tax)over time... so basing this years provisional tax payments on last years income saves us the interest for a year on any increase in income!

Do you agree with this comment?

  • agree3
  • disagree2
1 year ago
Wendy
Privacy, Privacy, Data Protection (NZ Government has a bad record with protecting NZers private information) Data Protection. None of these major issues are mentioned, in the Guiding Principles, yet are some of the primary issues for the NZ taxpayer in this discussion, especially in the world of Big Government. Unfortunately Big Government is being pioneered in NZ and whilst i see some benefits to this project it appears to be driven from the Big Government, Big Brother, perspective and what it will do for the NZ Government first.

Do you agree with this comment?

  • agree3
  • disagree1
1 year ago
Duncan Powell
I would rather keep the tax money in my bank until time to pay it to off set my mortgage. Answer = NO THANKS

Do you agree with this comment?

  • agree1
  • disagree1
1 year ago
Sharon Nolan
It must be easy to use by the taxpayer. Compliance should not be too time consuming.

Do you agree with this comment?

  • agree1
  • disagree1
1 year ago
Penny Dean
One of the things that makes me nervious when looking at these principles is there is no principle which tells me which area of the extensive set of requirements is going to be priority. I can't even fathom the true list of requirements for this system but I know for sure there will be conflicting requirements. IRD I would recommend you develop and prioritise such requirements based principles, get them signed off at the highest level, so they can be socialised and used to help drive the decision making around the solution and the approach. Without expectation setting at the beginning of what is actually possible and what is the priority the solution is extremely open to re-litigation every time a new key playing enters the project. What are the priority principles that will drive the solution? Smooth migration and the ability to access old information? Security? Flexibility? Ease of use? Compliance? Access across different interfaces? Third party integration? Internal government system integration? As a sole trader I am open to maybe not having all my needs met in the first release as long as I am taken on the journey. IRD needs to share the journey with me, they have a major legacy system, a project of this size has never been done before in NZ, is it likely that big bang will work or should be prepared for a long journey with multiple releases? With the hard decision making to come what are the principles that are going to actually keep the project team focused and true. With this in mind I would also like to see a principle around visibility of decision making.

Do you agree with this comment?

  • agree2
  • disagree0
1 year ago
Merestone
A refinement of the proposed principles is that the information must be provided in a format that is understandable by the average taxpayer. The Statements of Account and various other notices of advice that !RD send out (or have available on Secure Mail) are pretty well unintelligible. As well as having accountants work on upgrading the information systems IRD need to have communications people. A good example is some of the software and outputs that the power companies use to show your weekly power usage. Everyday terminology and graphics are used to communicate information instead of line items which are essentially outputs from accounting software.

Do you agree with this comment?

  • agree1
  • disagree1
1 year ago
jt
yes definitely no one size fits all. some will love the electronic forms, some wont and will prefer to still do paper. I am concerned with privacy, how to put changes to income as a sole trader on an IR3 return which is classed as personal not business, when you say you will populate my form with the correct income - you don't know my income yet as i haven't filled it in, and it will vary from year to year. having said this though, I heartily agree with saving as much administration costs as possible, and love the idea of a one sheet calculation page accompanying the current IR3 instead of a 30 page booklet -saving printing costs like these are a great initiative. but just don't make us do it online.

Do you agree with this comment?

  • agree0
  • disagree1
1 year ago
Debbie Win
Safety and Security

Do you agree with this comment?

  • agree0
  • disagree1
1 year ago
Ross
There is a principle not often referenced in these discussions - autonomy. This is much more than privacy. It is the principle of respect for legitimate boundaries around the right to decide one's own choices. Any integration of a government system with another entity's system must always respect autonomy. And so, while I strongly support efforts to simplify things, and make the life of a business owner and/or manager easier, my rights and responsibilities in regard to automated integration and data sharing between my own or my company's online systems and those of the IRD must be protected and preserved. Opting in, and approving transactions (or either money or data) must always be discretionary and without prejudice.

Do you agree with this comment?

  • agree1
  • disagree2
1 year ago
Michael Moynihan
I think a corollary of the 'no one size fits all' is to recognize that there are still many people who, for whatever reason (poverty perhaps being a major one) who are not Internet connected or savvy. There are some worrying hints among some of the comments of possible penalties or compulsion for those who do not or cannot access online services. There needs to respect for people in that situation. As the system currently operates (and I speak as an individual, not a business, taxpayer0 there are incentives now for doing returns online, in terms of faster turn-around times. Perhaps other incentives might be available but coercion is certainly not the way to go.

Do you agree with this comment?

  • agree1
  • disagree0
1 year ago
PL
Identity must be protected and accurately determined before information is accessed. Significant penalties should exist for invalid sharing and accessing of data. Who is accessing the information must be open to and controlled/authorized by the taxpayer. Secure. The scope for defrauding people is huge. Helpful. If people are engaging with the IRD they are generally not doing because they want to. Anything that does not make it easy will be a discouragement. Flexible enough so that changes in the way governments collect revenue does not result in an unreasonable/significant cost to changing the system.

Do you agree with this comment?

  • agree0
  • disagree1
1 year ago
PL
Does not seem as though much thought has gone into these principles. Considering tax paying a service and the taxpayer as a customer is a bit of a stretch. It is more an obligation.

Do you agree with this comment?

  • agree0
  • disagree1
1 year ago
Keith Harvey
Would be great if you can make links with accounting software eg xero.

Do you agree with this comment?

  • agree2
  • disagree0
1 year ago
Michael
There should be a tax-free personal allowance for every individual, along the same lines as the UK. That will take many people out of the tax system completely and thereby reduce the administrative burden on the IRD and reduce costs. This will free up staff to concentrate on those individuals and organisations who are not meeting their obligations, and whose tax burden is falling on the honest tax payers.

Do you agree with this comment?

  • agree0
  • disagree1
1 year ago
Michael Tyldesley
I would support the principle of a tax-free personal allowance. It would certainly give a further boost to the economy. Also talking of administrative burden on the IRD - I filed my annual tax return electronically on the 7th May - today, 12th May I receive in the post a letter from Eleanor Young (Manager, IRD) reminding me that previously I had filed an individual income tax return through myIR account, and that details are now available to file my return for 2015. It was dated April, so perhaps the post was slow. Someone was slow.

Do you agree with this comment?

  • agree0
  • disagree2
1 year ago
Michael Tyldesley
Principle 1 would need to be thoroughly defined. The elderly are not necessarily digital savvy. Also I receive overseas state pension, on which I pay RWT every 4 months. I would not like to see this become a monthly payment, simply because it would involve making a digital declaration each month and then having to make a cash transfer to the IRD via my bank. At 74 I have a hard time remembering to take my pills daily, never mind having to remember to pay the IRD. Working the tax out once a year and then receiving reminders to pay is quite sufficient.

Do you agree with this comment?

  • agree1
  • disagree1
1 year ago
Alison
Please do not exclude or create hardship for those who must or prefer to use paper and the post to complete their tax obligations. Stop charging postage on paper returns being sent to the IRD. This is a penalty for those who are not internet connected, and surely requiring people to pay extra (postage) every time they send money to IRD is both discriminatory and ludicrous?

Do you agree with this comment?

  • agree1
  • disagree0
1 year ago
Scroll To Top