Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

BUDGET 2012: PwC, EY query reliance on chasing tax dodgers

BUDGET 2012: Accountants query Budget reliance on chasing tax dodgers

May 24 (BusinessDesk) - This year's Budget is surprisingly reliant on squeezing more tax revenue from an economy that may not grow as fast as the Treasury forecasts it will, say major accounting firms PwC and Ernst & Young in early reaction to the Budget.

"Budget 2012 is premised on New Zealander’s stumping up with a lot more tax without any clear growth agenda," said Jo Doolan, a senior partner at E&Y, who has been a leading critic of the Inland Revenue Department's aggressive interpretation of existing tax law, which has redefined tax avoidance in recent years.

PWC's New Zealand chairman, John Shewan, said his firm was "surprised at the 29 percent increase in tax and GST forecast over the next four years."

“This is highly dependent on growth projections averaging 3 percent over this period,” he said.

Doolan said the message for high income earners in the Budget was that the government will target them for tax avoidance and tax them harder than was already the case.

People earning over $70,000 a year were already paying 51 percent of all the income tax collected, and this was now forecast to rise to 54 percent in the year ahead.

"We are so over the excuses of the global financial crisis, the Canterbury earthquakes and the ongoing financial insecurity," she said. "These are realities we live with. The burning question is what sort of growth platform the Government is creating beyond a hope-and-see strategy."

However, both said the Budget's moves against tax loopholes were less significant than expected, with Doolan noting the IRD's information technology is unable to cope with major tax system changes in the foreseeable future.

"This is not necessarily good news," she said in a statement issued after the Budget was released. "It may mean Inland Revenue will continue with its heavy-handed approach of using the anti-avoidance rules to override any perceived or real use of the existing tax legislation to save tax."

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop 3.0: How You Can Help Scoop’s Evolution

We have big plans for 2018 as we look to expand our public interest journalism coverage, upgrade our publishing infrastructure and offer even more valuable business tools to commercial users of Scoop. More>>

Having A Cow? Dairy Product Prices Slide For Fourth Straight Auction

Dairy product prices fell at the Global Dairy Trade auction, retreating for the fourth straight auction amid signs of increased production... Whole milk powder fell 2.7 percent to US$2,778 a tonne. More>>

ALSO:

Statistics: Butter At Record $5.67/Block; High Vegetable Prices

Rising dairy prices have pushed food prices up 2.7 percent in the year to October 2017, Stats NZ said today. This followed a 3.0 percent increase in the year to September 2017. More>>

ALSO:

Science: New Research Finds Herbicides Cause Antibiotic Resistance

New University of Canterbury research confirms that the active ingredients of the commonly used herbicides, RoundUp, Kamba and 2,4-D (glyphosate, dicamba and 2,4-D, respectively), each alone cause antibiotic resistance at concentrations well below label application rates. More>>

ALSO:

CO2 And Water: Fonterra (And Dairy NZ)'s Environment Plans

Federated Farmers support Fonterra’s bold push to get to zero emissions of CO2 on the manufacturing side of the Co-operative, both in New Zealand and across its global network. More>>

ALSO:

Fisheries: Decision To Delay Monitoring ‘Fatally Flawed’

Conservation group representatives say a decision by the new Minister of Fisheries, Stuart Nash, to delay implementation of camera monitoring of fishing efforts in New Zealand is ‘fatally flawed’. More>>

ALSO: