Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Reducing SME tax compliance costs

5 December 2007

Reducing SME tax compliance costs focus of discussion document

The government is inviting feedback on ideas for reducing tax-related compliance costs for small and medium-sized enterprises (SMEs).

The ideas are set out in a discussion document released today by Finance Minister Michael Cullen and Revenue Minister Peter Dunne.

“Although tax compliance costs are a fact of business, SMEs, which make up the bulk of New Zealand businesses, bear a disproportionate burden of these costs,” Dr Cullen and Peter Dunne said today.

“We know already that New Zealand has one of the simplest business tax systems in the world. The World Bank has ranked New Zealand ninth out of 178 nations for the ease of paying taxes – that’s ahead of Australia, the US, the UK, and Canada.

“It makes sense to reduce tax compliance costs so that smaller businesses can devote more of their resources to their core business activities, which can help to boost productivity and competitiveness – as noted by the recent Business Tax Review.

“Tax compliance costs can be reduced in a number of ways, ranging from large, comprehensive reforms to smaller, less dramatic changes. Each individual change may make only a small difference, but there could be a significant reduction in compliance costs overall if a number of changes apply to the same business.

“The government has already introduced a number of big changes designed to reduce costs for SMEs in relation to GST, provisional tax and PAYE.

“Many of the potential changes presented in the discussion document have to do with raising business tax thresholds. That can mean, for example, reducing the number of tax returns a business has to file, the data it must supply, or the calculations it must make. In short, raising thresholds may mean fewer tax matters for a business to deal with.

“The discussion document also looks at ways of simplifying the law for certain expenses – such as entertainment and legal expenses. It also looks at the vexed issue of fringe benefit tax on motor vehicles, as well as simplifying GST invoices.

“The government welcomes the views of business operators and their tax advisors on whether these ideas would help to reduce their tax compliance costs on a long-term basis. If so, we ask them to prioritise the ones that will help, so the focus is on the most useful initiatives.

“We have set two closing dates for submissions: 31 January 2008 for submissions on raising thresholds, so that resulting changes can be included in the taxation bill planned for introduction in May; and 29 February 2008 for submissions on all other matters, many of which will need more detailed consideration and may be included in a future taxation bill,” the Ministers said.

The discussion document, “Reducing tax compliance costs for small and medium-sized enterprises”, is available at www.taxpolicy.ird.govt.nz.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines


Wellington: Predator Free Capital Plan

Wellington City Council (WCC), the Greater Wellington Regional Council (GWRC) and NEXT Foundation, today announced a joint collaboration to make Wellington the first Predator Free capital city in the world. More>>


Gordon Campbell: On Judith Collins’ Efforts At Self Correction

Thousands of prisoners currently in prison may be entitled to an earlier release than expected – and compensation – because Corrections has incorrectly calculated their term of imprisonment. Unless of course, the government buries its mistakes by changing the law and retro-actively getting itself off the hook… More>>


More Justice & Corrections

Sector Opposes Bill: Local Government Bill Timeframe Extended

The Minister of Local Government Peseta Sam Lotu-Iiga has asked the Select Committee to extend the report back date for the Local Government Act 2002 Amendment Bill (No 2). More>>


Breed Laws Don’t Work: Vets On New National Dog Control Plan

It is pleasing therefore to see Louise Upston Associate Minister for Local Government calling for a comprehensive solution... However, relying on breed specific laws to manage dog aggression will not work. More>>


Not Waiting On Select Committee: Green Party Releases Medically-Assisted Dying Policy

“Adults with a terminal illness should have the right to choose a medically assisted death,” Green Party health spokesperson Kevin Hague said. “The Green Party does not support extending assisted dying to people who aren't terminally ill because we can’t be confident that this won't further marginalise the lives of people with disabilities." More>>


General Election Review: Changes To Electoral Act Introduced

More effective systems in polling places and earlier counting of advanced votes are on their way through proposed changes to our electoral laws, Justice Minister Amy Adams says. More>>

Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news