Businesses using AIM will make provisional tax payments more often. Provisional tax payments will be made monthly for businesses registered for monthly GST returns. Businesses on a two-monthly or six-monthly GST filing option will pay provisional tax every two months, as will those not registered for GST. Receiving the payments more frequently means Inland Revenue can remove the use of money interest exposure.
Payments will be generally made electronically to Inland Revenue. A business may present a case to the Commissioner explaining why they are not able to submit their payments electronically (for example; rural internet coverage limitations) and approval may be given for paper based returns.
The Government expects more regular payments of provisional tax will enable a better fit between when income is earned and tax is paid, assisting with financial planning and budgeting. Small businesses are generally very conscious of their tax liability and not knowing exactly how much it will be is often a source of stress. We know from previous consultations that being able to pay tax on a more regular basis will reduce this stress, particularly for those in seasonal or unpredictable industries.