Replace Hated Provisional Tax with Business P.A.Y.E

At Mangawhai today with Commissioners for the Kairpara District Council New Zealand First Leader and former Treasurer, the Rt Hon Winston Peters, has advocated for a bold New Zealand First policy to replace provisional tax with business pay as you earn (P.A.Y.E).

“In the interests of New Zealand we ask the government to support a much needed change to an oppressive business tax that strangles small businesses especially,” says Mr Peters.

“It speaks volumes of the policy neglect for small business and the provinces that we have had to come up with such a common sense solution that business P.A.Y.E is.

“Provisional tax is usually paid in three instalments so can be incredibly difficult to provision for but, much worse, it is usually based on a taxpayers previous tax year. And if taxpayers get this hated tax wrong there are punitive interest penalties which only stunts business growth.

“All businesses have good years and not so good years but provisional tax is no respecter of business cycles. Take Fonterra’s dairy farmers, who face a final milkprice of about $4.40 per kilogram of milksolids but provisional tax will be based on the $8.30 payout.

“New Zealand First proposes a simpler two-monthly rolling calculation tied with GST cycles for the payment of business income tax as it is earned, more-or-less, a business P.A.Y.E.

“Provisional tax forces business to pre-pay tax based on educated guesses of future earnings. This only sucks money out of businesses that is far better invested into growing businesses larger and employing people. Business P.A.Y.E makes common sense,” says Mr Peters.

ENDS

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