Crackdown to raise $183m
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.