2 August 2013
Top Issues in the Revenue Portfolio
Minister of Revenue, Todd McClay has today released Inland Revenue’s supplementary Briefing to the Incoming Minister (known as the BIM) that outlines the key issues facing the tax system.
Mr McClay said that the tax system was in good shape. The last few years have been particularly difficult for many New Zealanders as the government has dealt with headwinds from the GFC and the significant impact of the Canterbury earthquakes.
“The message I want to convey is that New Zealand is actually very well served by its tax system. The work of the last few years has greatly improved the integrity and the fairness of our tax system, particularly better alignment of tax rates. We’ve also tackled the issue of tax compliance in the property market and work is continuing in that area,” says Mr McClay
The coming months would see an increase in engagement with New Zealand taxpayers over the future role of Inland Revenue and its Business Transformation programme. Inland Revenue oversees collection of around $55b each year and the 7,000,000 registered taxpayers can expect value for money service which is modern and takes account of a changing business and tax environment. An example of the changing nature of Inland Revenue’s interaction is where 93% of individual tax returns were filed electronically for the quarter ending 31 March 2013 and 82.3% filed for the year to date”
“Inland Revenue and I will be engaging directly with New Zealanders on Business Transformation with a view to seeking the widest possible feedback on ways for Inland Revenue to further engage, reduce red tape and unnecessary compliance and create a more business friendly environment,” says Mr McClay.
International tax rules were increasingly becoming important in respect of protecting the tax base.
"In particular I have welcomed the OECD report on Base Erosion and Profit Shifting (BEPs) and will be working closely with the Commissioner to ensure New Zealand is an active part of this multilateral process. My officials will also report on other options for further strengthening our international tax rules later this year,” says Mr McClay.
Since receiving his Ministerial appointment on 11 June Mr McClay has overseen the passage of the Taxation (Livestock Valuation, Assets Expenditure and Remedial Matters) Bill, introduced the Taxation (Annual Rates, Foreign Superannuation and Remedial Matters) Bill, has begun consultation on tax policy changes to remove tax distortions on research and development costs for start-up Kiwi businesses, and public consultation on the tax treatment of charities following deregistration, has addressed an inaugural payroll conference in Rotorua and opened Inland Revenue’s new office in Christchurch.
“The document that I am releasing is a supplement to the full BIM that was produced in 2011. Together the two documents provide a good insight into the real issues facing the tax system in New Zealand. New Zealand’s tax system is in very good shape and the envy of many nations. It comes through careful and considered tax policy development – not knee-jerk reactions. We’ve got a plan, it's working and we’re sticking to it” says Mr McClay.
The Briefing to the Incoming Minister can be found at http://taxpolicy.ird.govt.nz/
Media contact: Rob Eaddy 027 459 6200