Crack­down to raise $183m

The Southland Times - - National News / Budget 2018 - Tom Pullar-Strecker

Busi­nesses face a fresh tax crack­down that Rev­enue Min­is­ter Stu­art Nash ex­pects will raise an ex­tra $183 mil­lion in tax over the next four years.

In­land Rev­enue got an ex­tra $31m in the Bud­get, over the next four years, to pay for more re­sources to en­sure com­pany tax re­turns are filed. The Gov­ern­ment will also con­sider ex­tra moves re­vealed in a Tax Work­ing Group pa­per last week to ex­pand the use of with­hold­ing taxes and checks on web­sites that sup­port the ‘‘gig econ­omy’’.

Over­all, the Gov­ern­ment is fore­cast­ing an ad­di­tional $726m of tax rev­enue over the four-year pe­riod, from the ex­tra en­force­ment mea­sures and from the Gov­ern­ment’s pre­vi­ously an­nounced ‘‘Ama­zon tax’’ and ringfenc­ing of in­vestors’ tax losses on rental prop­er­ties.

It ex­pects to raise $218m over four years from the Ama­zon tax, and $325m from the prop­erty in­vest­ment change.

But tax ex­perts sug­gest the ex­tra in­come In­land Rev­enue ex­pects from the Ama­zon tax is likely to be a mas­sive un­der­es­ti­mate, and it is likely to net at least $200m a year once fully im­ple­mented. If cor­rect, the to­tal ad­di­tional tax the Gov­ern­ment can ex­pect over four years from the com­bi­na­tion of mea­sures would be closer to $1 bil­lion.

The Ama­zon tax – which is a pro­posal that is out for pub­lic con­sul­ta­tion – would see foreign firms that sell more than $60,000 worth of goods to New Zealan­ders, col­lect­ing GST on items worth less than $400 shipped di­rectly to con­sumers, from Oc­to­ber next year.

Nash said cre­at­ing more ‘‘fair­ness’’ in the tax sys­tem was crit­i­cal to the Gov­ern­ment’s com­mit­ment to fis­cal re­spon­si­bil­ity.

‘‘This Gov­ern­ment’s plan in­cludes ad­e­quately fund­ing health, ed­u­ca­tion and hous­ing, in­creas­ing po­lice num­bers and lift­ing more chil­dren out of poverty. We are not chang­ing tax rates. But we do need a tax sys­tem that is sim­ple, bal­anced and fair,’’ he said.

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