Tax Relief Legislation Introduced
Legislation introduced into Parliament today will reduce the incremental penalty for overdue tax, and extend relief provisions to all types of tax.
"These measures should help to reduce the costs and stress associated with overdue tax payments, and provide some relief to taxpayers who find themselves in difficulty," Revenue Under-secretary John Wright said today.
"As a complementary measure, the grace period from use-of-money interest for taxpayers who receive a statement of account for overdue tax is being increased to give them more interest-free time in which to pay their overdue tax," Mr Wright said.
The changes include:
The incremental penalty for late payment
of tax is to be reduced from 2% to 1% each month that tax is
Provisions allowing Inland Revenue to cancel, remit or accept payment by instalment will be extended from income tax and fringe benefit tax to all types of taxes.
Inland Revenue will not have to seek the approval of the Minister of Finance to remit tax, refund it or enter instalment arrangements for amounts of more than $50,000, which will speed up the process of granting relief to taxpayers.
The grace period from use-of-money interest between issue of a statement of overdue tax and payment of that tax is being extended from 15 days to 30 days.
"These changes were inspired by recommendations made by the Finance and Expenditure Committee as a result of its inquiry last year into the powers and operations of the Inland Revenue Department. The committee concluded that more flexibility and leniency were needed in the administration of the compliance and penalty legislation and the department's debt management practices. The changes introduced today respond to that concern," Mr Wright said.