Rev­enue min­is­ter in for tax­ing work­load

The Dominion Post - - Business - TOM PULLAR-STRECKER

The Labour-NZ First govern­ment will have to hit the ground run­ning to achieve its pri­or­i­ties for tax and so­cial wel­fare re­form, com­ments from con­sul­tant Deloitte sug­gest.

In­land Rev­enue has been warn­ing since 2011 it will have lim­ited ca­pac­ity to im­ple­ment new pol­icy ini­tia­tives un­til it re­places its First com­puter sys­tem.

It de­scribed First to for­mer rev­enue min­is­ter Peter Dunne as be­ing ‘‘like a house full of ap­pli­ances con­nected to elec­tric­ity by a cable full of in­ter­twined wires’’.

But Deloitte’s na­tional tech­ni­cal di­rec­tor for tax, Robyn Walker, said the Govern­ment’s ‘‘100-day plan’’ to in­tro­duce a fam­i­lies pack­age and make changes to stu­dent loans and the min­i­mum wage would all af­fect the so­cial pol­icy sys­tems man­aged by the de­part­ment.

‘‘The new Min­is­ter of Rev­enue Stu­art Nash will be in for a busy time,’’ she said.

In­land Rev­enue aims to re­move its re­liance on First over the course of the next few years as a re­sult of its $1.7 bil­lion Busi­ness Trans­for­ma­tion (BT) pro­ject, which aims to sim­plify the tax and wel­fare sys­tems and do away with the need for 1500 staff.

The Trea­sury rated the BT pro­ject as be­ing in a rel­a­tively healthy ‘‘green/am­ber’’ con­di­tion in a mon­i­tor­ing re­port in June.

But fig­ures ob­tained from In­land Rev­enue by the Tax­pay­ers Union last week show it strug­gled to han­dle calls from busi­nesses fol­low­ing the first phase of the over­haul, which in­volved changes to the way busi­nesses sub­mit GST re­turns.

The data showed that, in May, In­land Rev­enue was un­able to an­swer more than one in three calls to its con­tact cen­tre about GST.

It was so swamped that it was un­able even to put more than 10,000 calls on hold, and in­stead had to cut call­ers off with­out plac­ing them in a queue.

In­land Rev­enue warned min­is­ters in Au­gust that the se­cond stage of the four-stage BT pro­ject would be ‘‘ex­po­nen­tially larger and more com­plex’’ and in­volved more risks, and that it was ‘‘track­ing slightly be­hind sched­ule’’.

Walker said the BT pro­ject would re­quire de­tailed over­sight from the Govern­ment as well as new leg­is­la­tion.

The Govern­ment’s other com­mit­ments in­clude es­tab­lish­ing the Tax Work­ing Group to con­sider tax changes that could ap­ply af­ter the next elec­tion, elim­i­nat­ing sec­ondary tax, in­tro­duc­ing tax in­cen­tives for re­search and de­vel­op­ment, and re­mov­ing a tax loophole that ap­plies to prop­erty spec­u­la­tors.

In ad­di­tion to the BT pro­ject, work car­ried over from the pre­vi­ous govern­ment in­cludes clamp­ing down on multi­na­tional tax avoid­ance and chang­ing the rules sur­round­ing em­ployee share schemes, she said.

Given the pre­vi­ous govern­ment had al­ready banked ex­tra in­come from multi­na­tion­als in its fore­casts for next year, it would be ‘‘im­per­a­tive’’ for the new govern­ment to get leg­is­la­tion into Par­lia­ment ‘‘as soon as pos­si­ble’’, she said.

Kiwi re­tail­ers are hope­ful the Govern­ment may also force their for­eign competitors to col­lect GST on all goods shipped to New Zealan­ders by the time Aus­tralia in­tro­duces a sim­i­lar rule in July.

Walker said tax ad­vis­ers ex­pected to be in­un­dated with read­ing ma­te­rial from the Tax Work­ing Group next year.

‘‘It’s an am­bi­tious pro­ject to get com­pleted within three years,’’ she said.

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.