New govt’s tax priorities focus on policy fixes
ONE of the first questions business owners ask when a new government enters power is what changes, if any, are coming in the area of tax?
Revenue Minister Stuart Nash provided a good steer on that when he addressed Chartered Accountants Australia and New Zealand last November.
The biggest question, he said, is whether our current system is fit for purpose. A week later, the government demonstrated its commitment to finding an answer by announcing the tax working group, to be headed by Sir Michael Cullen. Its brief is wide and includes specific emphasis on GST (but is unlikely to include GST rates) and the overheated housing market, almost certainly by focusing on speculative property buying.
Other issues the minister highlighted: ■ The future of work and tax consequences. ■ Ensuring company tax is fair and efficient and all companies pay their fair share. ■ Our ageing population and increased superannuation and healthcare costs. ■ The rapid growth of the sharing economy and its implications for the tax system. ■ Disruptive technologies and decentralised methods of operating.
"One thing you can expect to see is better communication with tax professionals before policy proposals are developed or implemented. That should minimise well-meant but fundamentally unworkable policy being introduced."
If you’ve ever wondered if you might have a tax refund tucked away at IRD, here’s some good news — a proposal for refunds to be issued automatically.
That’s part of IRD’s ongoing drive to work well with business. One thing you can expect to see is better communication with tax professionals before policy proposals are developed or implemented. That should minimise wellmeant but fundamentally unworkable policy being introduced.
Tax returns to get easier
In April, the Inland Revenue Department will introduce payday recording of PAYE information, that is, employers will need to report employee payments to Inland Revenue (IR) every pay run. To give employers time to put systems in place, businesses will have a year before it becomes mandatory.
Hand in hand with that, IRD will begin collecting PAYE information for the 2018/19 year to allow prepopulation of income tax returns. That should make life a bit easier for SMEs. What’s more, the release of Working for families is being brought forward to 2019, to coincide with tax returns being done under the new system, which, again, will make things simpler for SMEs.