Farm­ers ham­mered by tax depart­ment

The IRD needs to stop un­der­min­ing the in­tegrity of the tax sys­tem with al­le­ga­tions of avoid­ance, says Jo Doolan

Matamata Chronicle - - Rural Delivery -

They are es­sen­tial to our econ­omy. When loop­holes are per­ceived in our tax leg­is­la­tion, the proper pro­ce­dure is for con­sul­ta­tion to take place and changes to be made through leg­is­la­tion.

The leg­isla­tive changes to herd val­u­a­tion schemes are be­ing made.

They were in­tro­duced into Par­lia­ment as part of the lat­est tax bill, which had its first read­ing last Fri­day.

The per­ceived loop­hole is ef­fec­tively closed.

But the IRD is try­ing to ap­ply this leg­is­la­tion ret­ro­spec­tively, us­ing the an­ti­avoid­ance rules.

If you are tar­geted by the IRD, it is im­por­tant you man­age the sit­u­a­tion proac­tively.

It is also crit­i­cal that you ex­am­ine any re­struc­tur­ing plans – or any moves that give you a tax ben­e­fit – at the time the trans­ac­tion takes place so you can jus­tify your ac­tions on a com­mer­cial ba­sis.

Your only other op­tion is a trip to the tax con­fes­sional to man­age the po­ten­tial penal­ties and in­ter­est that will re­sult if you wait for a visit from the tax of­fice.

Sir Win­ston Churchill said: ‘‘Some peo­ple re­gard pri­vate en­ter­prise as a preda­tory tiger to be shot. Oth­ers look at it as a cow they can milk. Not enough peo­ple see it as a healthy horse, pulling a sturdy wagon.’’

We can only hope tax­pay­ers – and farm­ers and ex­porters, in par­tic­u­lar – start re­ceiv­ing the ap­pre­ci­a­tion they de­serve and the neg­a­tive non­sense re­sult­ing from ex­ces­sive use of the anti-avoid­ance rules ceases.

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