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CAB-20-MIN-0191 – Minute: Taxation (Use of Money Interest Rates) Amendment Regulations 2020

Date 4 May 2020
Reference CAB-20-MIN-0191
Document type Cabinet minute
Title Taxation (Use of Money Interest Rates) Amendment Regulations 2020
Downloads PDF (133 KB; 2 pages)
DOCX (54 KB; 2 pages)

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Taxation (Use of Money Interest Rates) Amendment Regulations 2020

Portfolio Revenue

On 4 May 2020, Cabinet:

1 agreed that the use of money interest rate on underpayments of tax be changed to 7.00% from 8.35%;

2 agreed that the use of money interest rate on overpayments of tax be changed to 0.00% from 0.81%;

3 noted that the Taxation (Use of Money Interest Rates) Amendment Regulations 2020 give effect to the new rates above;

4 noted the following changes as a result of the decisions in paragraphs 1 and 2 above, with a corresponding impact on the operating balance:

  $ millions increase (decrease)
Vote Revenue
Minister of Revenue
2019/20 2020/21 2021/22 2022/23 2023/24 &
outyears
Crown Revenue and Receipts: Tax Revenue (3.000) (19.000) (19.000) (19.000) (19.000)
Total Operating 3.000 19.000 19.000 19.000 19.000

5 approved the following forecast change in appropriations for Non-Departmental Other Expense as a result of the decisions in paragraphs 1 and 2 above, with a corresponding impact on the operating balance:

  $ millions increase (decrease)
Vote Revenue
Minister of Revenue
2019/20 2020/21 2021/22 2022/23 2023/24 &
outyears
Non-Departmental Other Expense: Impairment of debt and debt write-offs (funded by Revenue Crown) (6.000) (39.000) (39.000) (39.000) (39.000)
Total Operating (6.000) (39.000) (39.000) (39.000) (39.000)

6 authorised the submission to the Executive Council of the Taxation (Use of Money Interest Rates) Amendment Regulations 2020 [PCO 22913/2.0];

7 noted that a waiver of the 28-day rule is sought:

7.1 so that the regulations can come into force on 8 May 2020;

7.2 on the grounds that this will allow the regulations to be in force for the day immediately following the next standard instalment of provisional tax, which will have the benefit of providing support for some taxpayers to help cushion the economic impacts of COVID-19;

8 agreed to a waiver of the 28-day rule so that the regulations can come into force on 8 May 2020;

Michael Webster
Secretary of the Cabinet