Taxation Bill passes First Reading
Taxation Bill passes First Reading – Support for Christchurch, Police and Clergy
The Taxation (Annual
Rates, Employee Allowances, and Remedial Matters) Bill
passed its First Reading. This omnibus tax bill proposes changes to bring reater clarity to the tax rules and fairness to businesses and other taxpayers.
Revenue Minister Todd McClay said the measures in this bill support the Government’s goal of establishing a well-targeted, responsive and efficient tax system, which is essential to New Zealand’s economic growth and prosperity.
“The Bill makes changes to the tax treatment of allowances and other reimbursement payments paid by employers to their employees, and employer-provided accommodation.
“This is particularly relevant for the Canterbury rebuild. Where an employee is asked to work away from home, employer-provided accommodation and payments to cover accommodation expenses will be tax-exempt for up to five years,” says Mr McClay.
Mr McClay said that the bill will also provide certainty and fairness to the police and members of the clergy. In particular it will confirm a longstanding administrative practice that allows qualified tax relief for accommodation provided to ministers of religion and for clothing allowances paid to plain-clothes police officers.
“These proposals will be a relief to the police and clergy who do an important job on behalf of our communities and is a demonstration of the Government’s on-going commitment to the people of Canterbury,” he said.
Other changes in the Bill, including clarifications to the GST rules and introducing a tax exemption for some community housing providers, will make it easier for businesses and taxpayers more generally to understand their obligations.
“A key policy goal of the Government is growing the community social housing sector.
Helping low-income families achieve home ownership can be of significant benefit to the long-term financial security of that family and their children. This tax change is about supporting qualifying community organisations who help low-income families into home ownership through rent-to-buy or similar schemes”, says Mr McClay
“I expect the proposals in this Bill to make a real difference for businesses and taxpayers, as they contribute to an efficient tax administration, one that delivers the services to people that they need to enable them to manage their tax affairs”, says Mr McClay.
More information on the bill is available on Inland Revenue’s tax policy website, www.taxpolicy.ird.govt.nz