Article

Stop press – June Tax Bill introduced

Tax Alert - July 2018

By Emma Marr

As we went to press the Government introduced a new tax bill to Parliament (the June Bill).  The June Bill introduces a range of tax administration and remedial changes.

Tax administration

A number of changes are proposed to the way that individuals interact with Inland Revenue.  This is a natural follow on from the increased level of information employers and payers of interest and dividends have to provide to Inland Revenue.  As a consequence, the theory is that Inland Revenue will know everything they need to know to finalise the tax position of people who only earn employment or investment income.  Changes that individual taxpayers will see include:

  • Individuals will receive pre-populated account information and will only need to provide further information to Inland Revenue if they have earned income Inland Revenue doesn’t know about.
  •  Inland Revenue will monitor individuals’ earnings and advise them if they’re using the wrong tax rates, and in some circumstance advise payers of income to change the rate used.
  • Special tax codes would be more readily available – the application process will be simpler and able to be done online.
  • Overpaid income tax would be refunded automatically for some individuals – primarily people who earn only employment or investment income.

More general changes are being proposed for the tax administration rules including:

  • Extending the binding rulings regime to more taxpayers by simplifying the process and making it cheaper for small taxpayers, and extending the scope of binding rulings.
  • Allowing the Commissioner to correct errors in the tax legislation by several non-legislative methods, including an Order in Council (signed by the Governor General on the recommendation of the Minister of Revenue), a binding determination by the Commissioner, and an administrative action by the Commissioner.
  • Allowing greater flexibility to change errors in tax returns in later periods.
  • Changes to the information gathering and information sharing powers of the Commissioner.

Policy changes

A number of other policy amendments are also proposed:

  • Introducing new contribution rates for Kiwisaver (6% and 10%)
  • Allowing over 65s to contribute to Kiwisaver
  • 13 additional charities are added to the donee list in the tax legislation
  • The annual income tax rates are set (no changes from this year)
  • Extension of the securitisation regime in the tax legislation
  • Remedial GST amendments

We will publish more detailed analysis of these proposals in the coming weeks on www.taxathand.com, and in the August Tax Alert.  In the meantime if you have any questions, please contact your usual Deloitte advisor.

 

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