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Inland Revenue

Tax Policy

Announcements
PUBLISHED 10 August 2010

Government smoothes way for GST rate transition

Amendments to the GST legislation to help businesses make the transition to the new GST rate by 1 October have been proposed. This was announced today by Revenue Minister Peter Dunne in a media release.

Details of the changes are available in a technical paper (PDF 26KB). Public comment is invited on the draft legislation which is available by calling Maraina Hak on 04 890 6386. Comment on that legislation is required by 16 August 2010.


Hon Peter Dunne
Minister of Revenue

Media statement

Dunne: Govt smoothes way for GST rate transition

Revenue Minister Peter Dunne today released details about amendments to the legislation to help businesses make the transition to the new 15 percent GST rate by 1 October.

The recommendations, approved by Cabinet yesterday, came from the GST Advisory Panel which was established in May to identify issues businesses will face in implementing the new rate, and come up with potential solutions.

Mr Dunne said the transition was more complex this time than in 1989 when the rate was last increased.

“Today’s businesses offer a wider variety of contract and payment options than was the case 20 years ago, and there are now a myriad of business and accounting processes, including the far greater use of electronic systems,” Mr Dunne said.

He explained that the main areas of concern related to situations where the supply of goods or services straddled the effective date of the new rate.

“The proposed changes will ensure that the legislation better takes into account business practice, removes excessive compliance costs in particular cases or removes an unfair outcome for the business or customers concerned.”

The changes will be included in a Supplementary Order Paper to the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Bill 2009, which is reaching its final parliamentary stages.

“Other GST and income tax matters will also be dealt with by the same process,” Mr Dunne said.

The technical paper outlining the proposed GST rate transition changes is available on both the GST Advisory Panel website (www-gstadvisory.govt.nz [site no longer available]) and the Inland Revenue Policy Advice website (www.taxpolicy.ird.govt.nz)

The public have until Monday, 16 August, to further comment on the draft legislation, which is available on request from the Minister’s office (04 817 9728) and Inland Revenue (04 890 6386).

Ends

Mark Stewart | Press Secretary | Office of Hon Peter Dunne
Cell +64 21 243 6985