Bill introduced to modernise and simplify New Zealand’s tax system

The Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Bill was introduced in Parliament yesterday.

The Bill proposes measures to simplify tax returns for individuals and update the Tax Administration Act. It also adds 13 charities to the list of donee organisations in schedule 32 of the Tax Administration Act, proposes amendments to make KiwiSaver more accessible, and includes numerous other policy, remedial and technical changes to tax legislation.

For more information see:

- the Minister’s media statement;
- the Bill as introduced;
- the commentary on the Bill;
- the regulatory impact assessments; and
- Making Tax Simpler feedback summary documents and Cabinet papers.

Hon Stuart Nash
Minister of Revenue

29 June 2018

Media statement

Tax simplified for individual taxpayers

A new tax bill introduced to Parliament will mean automatic tax refunds for around 750,000 New Zealanders.

Revenue Minister Stuart Nash says the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill will simplify tax obligations for individuals who only earn employment or investment income. It will remove the need for them to file a personal tax summary (PTS) to get a tax refund.

“Filing a PTS is currently the only way for individuals to get a refund, but around 750,000 people don’t follow this process. They are missing out on their money as a result. We want people to get their refunds automatically”, Mr Nash says.

“The only reason to file a PTS in the future will be if a taxpayer has additional information they need to provide. If this is not the case, Inland Revenue will automatically work out the amount of the refund or the tax to pay.

“The legislation also amends the Tax Administration Act to clarify how Inland Revenue can collect, use and disclose taxpayer information. Inland Revenue follows good rules around the use of information but the changes will improve efficiency and clarity.

“The changes will better focus the confidentiality rule to clearly protect taxpayer information. It will clearly set out any exceptions. It strikes the right balance between careful treatment of taxpayers’ confidential information and improved customer service,” Mr Nash says.

In other measures, the legislation:

introduces a ‘short process ruling’ where small businesses can more easily apply for a binding ruling from Inland Revenue on any tax matter;
provides the Commissioner of Inland Revenue with more flexibility to deal with minor anomalies in tax legislation;
allows over-65 year olds to join KiwiSaver as a provider of low cost managed funds. Employers would not be obliged to contribute for over-65s but may do so voluntarily
adds new KiwiSaver contribution rates of 6% and 10%
improves the ability of taxpayers to fix errors in tax returns; and
sets the annual tax rates for the 2018-19 tax year, which remain unchanged from previous tax years.

“This Bill represents a significant step in the modernisation and simplification of New Zealand’s tax system, supporting much of Inland Revenue’s Business Transformation work,” Mr Nash says.

More information can be found at: taxpolicy.ird.govt.nz

Feedback summary documents

Documents summarising feedback and submissions from Making Tax Simpler consultation documents:

Making tax simpler – Towards a new Tax Administration Act: summary of submissions: A summary of the submissions received on the Making tax simpler – Towards a new Tax Administration Act consultation document, released in November 2015.
Making tax simpler – Proposals for modernising the Tax Administration Act: summary of submissions: A summary of the submissions received on the Making tax simpler – Proposals for modernising the Tax Administration Act consultation document, released in December 2016.
Making tax simpler – Better administration of individuals’ income tax: summary of feedback: A summary of the feedback received on the Making tax simpler - Better administration of individuals' income tax consultation document, released in June 2017.
PAYE error correction and adjustment – anonymised summary of feedback: A summary of submissions received on the PAYE error correction and adjustment officials’ issues paper, released in August 2017. This is an anonymised version of the Cabinet paper attachment.