Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

Tax Working Group makes “sensible and pragmatic” proposal

Chartered Accountants says Tax Working Group makes “sensible and pragmatic” proposal on taxing capital gains

20 September 2018

For immediate release

Tax Working Group makes “sensible and pragmatic” proposal on taxing capital gains

Retirement savings taxes “kicked for touch,” but warning about picking winners

CA ANZ applauds focus on reducing tax compliance costs for small businesses

The Tax Working Group today indicated there’s no need to start from scratch to extend the taxation of income on capital. “The status quo is a perfectly fine launch pad for what the Government wants to achieve,” said John Cuthbertson, New Zealand Tax Lead for Chartered Accountants Australia and New Zealand (CA ANZ).

Commenting on the release of the working group’s interim report today, he said “the capital gains the Government is seeking to tax could be best targeted by expanding the existing income tax regime rather than introducing a separate Capital Gains Tax.”

The group is considering two main options:

• Extending the existing tax net by taxing gains on assets not already taxed

• Taxing certain assets, such as shares, on a deemed rather than actual basis

Cuthbertson said an example of how the existing tax system could handle capital gains was land speculation. “Inland Revenue has plenty of tools under the existing land tax provisions to address speculative behaviour. Gains from sales of residential rental property can be adequately dealt with by an extension of these provisions.”

As the working group acknowledges, a standalone Capital Gains Tax introduces complexity and extra compliance costs, he said.

Retirement savings

The working group says it is giving further consideration to the choices and trade-offs around retirement savings.

Cuthbertson said this was a “kick for touch, or at least till February when the final report is out. The design of a capital gains mechanism could ultimately decide winners and losers based on the form of ‘retirement saving’.

“Kiwis save for their retirement in many ways. Any taxes or concessions for retirement savings need to be fair to all forms of retirement savings. Picking winners by deciding which forms of savings are in, or out, of scope may create a dilemma for the Tax Working Group.”

If the group decides to specifically exempt savings held in Kiwisaver, the incentive created needs to be acknowledged.

Small business

“Chartered Accountants Australia and New Zealand congratulates the working group on its recognition of the disproportionate burden tax compliance costs impose on small businesses,” Cuthbertson said. Reducing this burden will be more meaningful for small business than a progressive or reduced company tax rate.

“Our small businesses are often treated as if they have a big business finance team to meet the demands of our tax system.

“Compliance and complexity creep are more than annoying – they are now seriously hurting the 97 percent of Kiwi enterprises with fewer than 20 employees.”

CA ANZ supports further work being undertaken to investigate a reduction in compliance costs as an alternative to introducing a progressive company tax rate. CA ANZ offered a number of alternatives during consultation to reduce compliance costs.

Acknowledgement by the group that the current disputes process is not fit for small businesses, and the recommendation of a taxpayer advocate service to assist taxpayers with Inland Revenue disputes is welcomed by CA ANZ. This recommendation is in line with our earlier consultation with the group.


© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Commerce Commission: Retail Fuel "Not As Competitive As It Could Be"

The Commission has outlined some options it considers could improve competition. There are two broad sets of options it thinks may have the potential to help create a competitive wholesale market. These are:

• Greater contractual freedom to make it easier for resellers to switch between suppliers; and
• Enabling wider participation in the majors’ joint infrastructure, notably the shared terminals and supporting logistics involved in their borrow-and-loan system.
Further options, including improving the transparency of premium petrol prices, are discussed in the draft report. More>>

 

IPCA On 'Rawshark' Investigation: Multiple Police Failings In Hager Searches Confirmed

The Independent Police Conduct Authority has found that the Police's unlawful search of Nicky Hager's property in October 2014 resulted from an unwitting neglect of duty and did not amount to misconduct by any individual officer... More>>

ALSO:

Broadcasting Standards: Decisions On Coverage Of Mosque Attacks

The Authority upheld one of these complaints, finding that the use of extensive excerpts from the alleged attacker’s livestream video on Sky News New Zealand had the potential to cause significant distress to audiences in New Zealand, and particularly to the family and friends of victims, and the wider Muslim community. More>>

PM's Post-Cab: Bad Mail

Cabinet was updated on the process around prisoners sending mail, following the accused Christchurch gunman sending letters that "should have been stopped". All mail of "high concern prisoners" will now be checked by a specialist team and a changes to the legal criteria for witholding mail are expecting to go to a cabinet committee in this parliamentary session. More>>

Welfare: Ongoing Drug-Test Sanctions Contradicts Govt’s Rhetoric

Reports that two-thirds of beneficiaries who fail drug tests are still having their benefit sanctioned contradicts the Government’s so-called health approach to drugs. More>>

ALSO:

Welfare: More Measures To Help Those Facing Homelessness

Ministers have announced $54 million in Government funding for initiatives which will support at-risk individuals and whānau to stay in their existing tenancies. The funding will also provide additional wrap around services. More>>

ALSO:

Corrections: New Strategy On Māori Reoffending And imprisonment

Authentic co-design with Māori, incorporating a Te Ao Māori worldview, and greater connectedness with whānau are key elements of Hōkai Rangi, Corrections’ new departmental strategy designed to address the long-term challenge of Māori reoffending and imprisonment. More>>

ALSO:

Pacific Island Forum: Australia v Everyone Else On Climate Action

Traditionally, communiques capture the consensus reached at the meeting. In this case, the division on display between Australia and the Pacific meant the only commitment is to commission yet another report into what action needs to be taken. More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels