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Taxing personal use of work mobile phones

Media statement Friday, March 1st, 2013

Taxing personal use of work mobile phones, laptops and car parks, to hit SMEs hardest

Inland Revenue's latest tax tightening proposals will hit smaller businesses the hardest with extra compliance costs, the Employers and Manufacturers Association says.

"The impact of the new taxes on car parks along with the proposal to tax the personal use of mobile phones and laptops will aggravate compliance costs for all businesses but especially SMEs," said Kim Campbell, EMA's chief executive.

"Its absolutely not worth IRD proceeding with this.

"A recent national survey or ours found 47 per cent of employers allow the personal use of smart phones, and 35 per cent allow personal use of tablets and laptops provided for business purposes.

"72 per cent provide free car parks for their staff. *

"Trying to tax things like this will simply see many employers ceasing to provide them.

"Their employees won't be happy, employers don't want to do it, and the tax revenues collected will be at best miniscule.

"The cost to SMEs of tax compliance is typically three times more per person employed than for larger firms.

"IRD's policy advisors would be much better directed to work out how New Zealand could cut its company tax rate thereby attracting more overseas companies to pay their tax here and lift their revenues rather than stalking small dividends like this.

"At the same time cutting the company tax rate would boost investment.

"Some of the thinking on taxing specialised work clothing, meals and accommodation allowances also needs to be reworked."

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