Business Transformation: Inland Revenue needs you!

We wish to remind readers that submissions on two important Business Transformation consultation papers, “Towards a new Tax Administration Act” and “Better administration of PAYE and GST” are closing soon on 12 February 2016.  These papers are actually the third and fourth papers released as part of the project to modernise and overhaul the tax system. 

The paper “Towards a new Tax Administration Act” considers how the tax administration system can be improved, specifically the role of the Commissioner of Inland Revenue, information collection, tax secrecy and the role of taxpayers (and their agents).

Key proposals from the other paper, “Better administration of PAYE and GST” are focussed on modernising the PAYE and GST administration and collection rules.  For example proposals include:

• Submitting PAYE information and payment to Inland Revenue in real time (i.e. as a business runs their PAYE process); and
• Allowing businesses to submit GST returns directly from their accounting software.  Inland Revenue is already undertaking testing and working with MYOB and Xero to trial a new service to file GST returns directly through accounting software to Inland Revenue.

There is no doubt change is coming whether we like it or not.  For more information on these proposals, please refer to our November 2015 Tax Alert where we covered the papers in some detail.  It is important that businesses engage in the process and have their say about the changes proposed. The next piece in the business transformation puzzle will be the business taxation discussion document, which will consider provisional tax, use of money interest rules, the provision of information and the taxation of micro and small businesses.  This is expected to be released in the next couple of months.

In keeping up with technology, the Government has made it super easy for everyone to comment on these proposals.  There is a website covering the PAYE and GST proposals with specific sections targeted at employers, employees and those that deal with GST processes.  Anyone is free to post / reply to comments on the various questions posed.  There are also a number of technical questions posed covering secondary tax issues, holiday and extra pays.  There is a separate website for posting comments on the “Towards a new Tax Administration Act” paper.

If you have any comments in relation to these papers, wish to discuss the potential effect on your business or would prefer to make a formal written submission, please contact your usual Deloitte tax advisor.

Tax Alert February 2016 Contents:

• Collective agreements and employee allowances – are they taxable or exempt?
• Implementing changes to transfer pricing documentation arising from BEPS actions
• Taxpayer wins important residency case against Inland Revenue
• Proposed deduction denial for detailed seismic assessments
• Tax treatment of lump sum settlement payments – draft released
• Business Transformation: Inland Revenue needs you!