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$857m to deliver a modern tax system

Hon Michael Woodhouse

Minister of Revenue

26 May 2016

$857m to deliver a modern tax system

Budget 2016 invests $503 million of new operating funding over the next four years and $354 million of new capital funding for Inland Revenue’s new tax administration system, Revenue Minister Michael Woodhouse says.

“It is important that our tax system keeps pace with changes in New Zealanders’ expectations and changing business models,” Mr Woodhouse says.

“This investment will provide a modern, simplified tax administration system that meets New Zealanders’ needs, reduces compliance costs for businesses, and helps people get their obligations and entitlements right first time.

“The tax system transformation will be designed around New Zealanders and their businesses, giving people greater ability to manage their tax affairs online.

“Businesses will find that meeting tax obligations will become part of their normal processes, rather than a separate activity. This will allow small businesses in particular more time to devote to their business rather than taxes.

“These benefits will be delivered by increased use of digital technology, through the development of Inland Revenue’s new IT system.

“Inland Revenue’s current system is 25 years old. We need to invest in a new tax system that can keep up with the changing demands of New Zealand’s modern economy.

“These measures will deliver a modern tax system that will contribute to a healthy, growing economy, maintain a robust tax base, and distribute entitlements.”

The programme is expected to generate $284 million of savings for Inland Revenue and $280 million in additional tax revenue from greater compliance. These savings will be used to provide further funding for the programme, on top of the $857 million provided in Budget 2016.

This funding is in addition to the $187 million SME-friendly tax package announced in April.


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