Farmers hammered by tax department

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

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.