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Benefits

Are there any other benefits from greater use of digital services?

Are there any other benefits for those who interact with the tax administration system from the introduction of more, better and secure digital services apart from:

  • 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; and
  • improved delivery of services across government?

Comments

Sean Fitzgerald
As far as I can see, the "benefits" accrue more to Inland Revenue, and this is usually the focus with Inland Revenue initiatives. As I have commented elsewhere, "tax simplification" usually amounts to anything but.

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1 year ago
George Spark
Well if provisional tax were replaced with a tax based on actual earnings (for example payable at month end or bi-monthly, based on earnings, like GST is at present) that would be highly beneficial for those of us who have businesses with income that various a lot - provisional tax as it is at present can be a major disadvantage/disincentive to operating some types of business.

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1 year ago
Matt R
I agree to most of what George said. But there needs to be the ability to factor in other tax aspects that aren't directly linked to revenue eg if a company has significant tax depreciation because of large capital equipment, then taking a percentage of revenue or GST (unless the percentage can be adjusted) may not be appropriate. The same would be for a service type business, where employee expenses do not give rise to an input tax deduction, but the revenue is subject to GST output tax. How or what mechanism could be used to address this issue, while being robust so not open to abuse?

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1 year ago
Ad
once a year a company has to file accurate annual returns so why even have provisional tax at all? If the government has a cash flow issue we can pay in 3 installments (afterwards) or spread the actual tax due date based on the companies actual financial year end date?

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1 year ago
pau
This applies equally to personal tax payments. Provisional tax requires an estimate that has a small margin of error or allow ird to over estimate the tax. Allowing me to complete IR3 online as draft from day 1 of the tax year would allow me to manage payments without thousands of dollars over payment only to claim it back. Churn is a cash flow issue that can be addressed by simply issuing the IR3 on day 1 of the tax year. It is not a small amount when your only income is an overseas pension. The over payment can amount to a months income.

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1 year ago
Kevin
There is a huge opportunity to rationalise the number of forms required when interacting with the Inland Revenue. As a user I just want to provide the correct information and pay the right amount of tax not jump through many hoops to get there. For example filling out a separate form to claim deductions for contributions to school and kindergarten - why isn't this just a section on my tax return? On a business level the choice of forms to fill out is bewildering and wholly unnecessary - I only want to fill out one return per year giving the IRD all the information they need in one place. Simplify it for us please.

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1 year ago
Kevin
So, with this greater efficiency I shall see a reduction in my overall tax bill? Great!

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1 year ago
Peter William Storey
I agree with George Spark here. Anything that simplifies running a small businesses with unpredictable and fluctuating income gets my vote.

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1 year ago
Glenn
Less use of call centres. Call centre staff calls to business taxpayers generate more confusion than solved problems. Anything that reduces these uninformed calls would be a benefit to the overall tax management system in NZ.

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1 year ago
merv Owsley
You say you would like to move more into the digital environment, and you sent this to my cell phone and yet, the IRD will not take calls from a cell phone. A lot of us only use CELL PHONES and don't have access to land lines during business hours. It is time the IRD "practices" what it is wanting us to do.

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1 year ago
Rebecca Phillips
Ha IRD got snapped! This is a great example of the government not moving with modern times despite all the rhetoric. Is it any wonder that initial reactions to new system roll-outs/"improvements" are greeted with healthy skepticism?

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1 year ago
Liz Thompson
I can not forsee anyone using a mobile app for tax submissions. Paper or online is sufficient. Response times and communication is the real problem not filing or systems

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1 year ago
Chris Redshaw
My company provides Animated Explainer Videos the same that are used by IR. There are many benefits to using these & the most important of all is educating people in a simple, understandable & engaging format.

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1 year ago
John Gillanders
If we are looking at near-realtime processing of taxes (e.g. Automatic handling of GST for every transaction as it is processed), another benefit is the ability to piggyback other near-realtime services off of that, for example, automatic & manual categorisation of expenses for business expenditure analysis and forecasting.

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1 year ago
Toni New
Agree with all of these and well overdue speed of the sight is so slow and deters so many people from using it so improvements I think will see more use of the site. Look forward to seeing the changes and hope they don't take another 10 years to undertake surely this is a necessity that improves the system overall.

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1 year ago
Ralph McCleery
If we could be "connected" and as we rolled our month all compliance requirements were met through digital exchange it would free up admin staff time for other more productive duties.

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1 year ago
Marc Wilson
Paying provision tax based on actual current earnings (similar to GST) would make huge difference to me as self employed, fluctuating unpredictable income – I just had to pay an unexpected equivalent of extra 2 years usual tax within 2 months, due to inaccurate provisional forecast. Seems so obvious//sensible. I'm sure necessary variables could be built in to accommodate extra factors like depreciation etc.

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1 year ago
Emma
While considering greater use of digital technology for businesses I would like to see IRD to review Kiwisaver payments to make them more visible, for employees, employers, and kiwisaver providers. At present tracking mine, my husbands and my daughters payments over the five accounts, with three suppliers the timing of deposits vary a lot. Is this because it is held up by IRD or the suppliers. Surely if electronic Kiwisaver amounts are paid by employers it should show in your kiwisaver account within 24 hours as a bank deposit would . Then employees can reconcile this immediately to payslips.

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1 year ago
Rebecca Phillips
yes the lack of transparency and the lag between deduction of KS from pay and it arriving at the KS provider is quite unacceptable, and a good example of where the IRD should really get their own house in order imho. It takes weeks sometimes, and if there are the errors it is so difficult (impossible) to trace back and fix. Turns out my husband was "sharing" his KS account at the provider end with another person of the same name for six years but it was never picked up by any kind of IRD internal audit which surely should have identified that two IRD clients with different tax numbers were paying into the same provider account. Someone, somewhere made a big mistake that resulted in a lot of confusion when it finally came to light, AND because of the lag from pay deduction until funds arrive in KS account, it was impossible for my husband to get hold of accurate, upto date KS payment information from the IRD which clearly identified all his payments as having been received and credited correctly at the provider's end. In the end, after challenging the "fixup calculations" by the provider and having them re-calculate them again upon our request (!), we ultimately had to accept the provider's second lot of calculations as being correct. Of course, husband should have been more aware of what was happening with his KS but it was an absolute debacle and leaves me very uneasy at the competence and adequacy of the IT/systems interfaces/links between the IRD and KS providers.

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1 year ago
Nevan Lancaster
Yes great, digital use would cut down on Admin. I already allow Xero to know all the details of my business. How hard could it be for you guys to do the same. Set up a small business tax software or just use Xero feeds. Each month or 2 send out a summary and then Direct Debit or pay any tax owed or owing. If we need to make adjustments then allow that. End provisional tax and move to a real time system. Its not hard and doesn't require reinvention of the wheel as the software to do this is already out there.

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1 year ago
Mike Ryland
if improving the digital system means i can calculate and pay company tax quarterly i am keen to avoid getting a huge tax bill at the end of the year to find i have to pay it off. most new companies that fail with in the first two years struggle to pay their tax bill. tax paid quarterly will have higher compliance less time for ird to arrange payment options and maybe a higher success rate of new businesses.

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1 year ago
Dave
For those of us retired but with regular property income monthly, a monthly taxation scheme would be useful

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1 year ago
Niki
As another Prov tax payment approaches, and as my business has grown, I am now engaging our accountant to see what our actual prov payment should be. I am keen to see how pay as you go could work. We do it with GST so why not with Prov tax.

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1 year ago
Laurence Simpson
I operate a small business with a seasonal fluctuation income I would rather pay tax based on actuals rather than a historical figure and that could be calculated simply rather than having to pay a Tax agent to calculate and monitor has to benefit my bottom line.

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1 year ago
maygray
what are the controls? How is this increase in information access to the Tax department and vulnerability of tax payer information to be protected? This is only the government side of the story.

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1 year ago
L Gaugau
Save the trees? Go DIGI-biz (eg: start up, sm-med, lrg) and DIGI-customers (eg: Joe Bloggs FTC) The service DIGI-biz intends to provide will keep NZ up with technology as well as in aid of our GDP, if we lag in technology and the world around us moves ahead then we set precedents to businesses, educators and students to learn about technology that we don't use and then they move overseas because we keep to our comfort zone - what happens when our businesses in NZ cannot trade because the outside world cannot connect with our technology? If we are not up there now then we miss out on international market opportunities and local markets. Eventually we will end up being local market traders, those businesses that can afford digi will be able to compete so is DIGI-biz good for start up, sm-med businesses - yes. Government DIGI-biz doesn't just support existing global giant businesses, this also supports start up entrepreneurs, sm-med bizo's in aid to increase online trading and exports which leads to increase in employment opportunities in the digi world and our GDP in consumption. Moving forward it is about preparing our next generation to align with outside influences to trade. If we don't go digi then DIGI-bizo's and DIGI-customers will lag and miss opportunities of income and revenue for our country and our next generation. It is time to go DIGI New Zealand and we need to support the government so that they can help us as well as more important we can show the world that NZ is up there with technology even though we may be hobbits - we are DIGI-hard!

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1 year ago
John Cardis
Yep. If IRD narrowed down the gap between dates for paying Provisional Tax by the use of direct communication, I'm all for it. Pehaps small business owners wouldn't be landed with "Use of Money Interest" This is a totally unfair charge. If Tax is paid on the due date set by IRD, why is this charged? Money is handed out left right and centre in the community but I am charged interest even though I pay on time. WHY?

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1 year ago
Carol
Automated electronic filing may work for some. I have 2 companies - one makes a profit and is liable for GST; the other is a rental property company where GST does not apply and this company makes a loss. How would an automated system offset these 2 entities? I do this manually so I don't overpay my taxes during the year. I prefer to maintain control over what I pay. Very in favour of moving provisional tax to a pay as you earn system, though. The current Provisional Tax system does not work if income fluctuates or you take a lot of time off work during the first 4 months of the tax year. One year I went on holiday from the beginning of April until the 2nd week of July. I still had to pay 1/3 of my annual tax bill in the first installment even though I hadn't earned enough to make the payment (and was not very flush after a 3 month holiday). This caused serious financial hardship and IRD did not care - being 'fair' doesn't come into their thinking. I'm keen to see a fairer system in place but can't see how this proposal would work.

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1 year ago
Bruce Walker
I run a small business and have developed my own spread sheet for my GST etc. I submit a return every six months and find using the IRD's electronic version for this to be easy, straightforward and quick. Consequently any development in this area is encouraged. I consider that current method of provisional tax is at best cumbersome and I loathe the fact that one has to use a crystal ball to foresee what income one will receive...

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1 year ago
Christopher Lim
The world is going mobile and mobile data cost in coming down. Whatsapp is hurting the SMS and now voice markets. Going digital is the way to go because we live in a mobile and borderless world. Going digital would allow contributor to transact and view their own account information in real time. Going digital would allow contributor to view real time statistics and information at the geo-political and national level. But beware of the dangers of hackers waiting to devour your information, so security would be a great concern. User must be educated and made aware of these dangers and how to avoid them.

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1 year ago
Evalyn
We are a small business and I do my own gst and file online.. I find this very simple and I am not interested buying or learning a new system as this will proof to be more of a pain then help. As nothing is as simple as it is made out to be! Secondly I am against ird linked to my accounting system. This is invading into my privacy!!! They need to improve their current online system , to link all our current information together so we can track our payments and anything that is due to ird but not implement business to use a new system when we are happily using our own ways of doing paperwork. It should be free to use to who ever wants to not a compulsory action for everyone.

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1 year ago
AB
* meeting the needs of an increasingly digital savvy population

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1 year ago
Morgan Wilson
Keep tax for the individual simple. Hide what does not need to be seen or interacted with and leave only what the user needs. Keep the language simple also.

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1 year ago
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