Dunne: ‘Business-friendly’ SOPs tabled
Amendments to cut compliance costs around the upcoming GST rate change and the repeal of fund withdrawal tax are among “business-friendly” changes being made to a key piece of tax legislation, Revenue Minister Peter Dunne said today.
The changes were in Supplementary Order Papers tabled this afternoon to amend the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Bill in Parliament.
Mr Dunne said the GST transitional measures in the Bill largely focus on contracts that straddle the 1 October rate change date.
Certain successive supplies, such as insurance, finance leases and lay-by contracts that straddle the 1 October date will be able to continue at the 12.5% rate for a transitional period to reduce compliance costs. The transitional periods will vary for the type of supply.
There are also measures to better align the GST time of supply rules with business practices.
A further provision extends the remission of late payment penalties and the associated interest for GST returns to cover the period immediately before 1 October.
Mr Dunne also commented on the early repeal of fund withdrawal tax, saying there were significant compliance costs associated with phasing this out.
“Accordingly, from 1 April 2011 we have decided to repeal fund withdrawal tax.”
The repeal of fund withdrawal tax will apply for all superannuation fund withdrawals from 1 April 2011. Measures set out in Budget 2010 for complying with the requirement to track contributions will no longer be required. Instead, Inland Revenue will monitor salary arrangements entered into until 1 April 2011.
The SOPs contains a number of other proposals that are generally taxpayer-friendly, Mr Dunne said.
These include measures to assist bank liquidity, to remove overreach from what are colloquially known as the “imputation credit shopping rules” and changes to the tax treatment of certain optional convertible notes. There are also a number of time-sensitive remedial items.
“Government’s intention is to make the tax system fairer and Budget 2010 was driven by this principle.
“These changes will ensure that businesses and individuals are not unduly affected by tax compliance requirements,” Mr Dunne said.
Mark Stewart | Press Secretary | Office of Hon Peter Dunne
Cell +64 21 243 6985