IRD looks at tighter tax rules on livestock valuations, multi-use assets
By Paul McBeth
May 19 (BusinessDesk) – The Inland Revenue Department is set to continue tightening the tax system, with the treatment of livestock valuations, multi-use assets and income definitions.
This year the tax department will look at whether farmers value livestock to win a tax advantage depending on the method used, the government announced in the budget. It also wants to examine the tax treatment of high-value assets that are both rented out and used privately, and if non-cash fringe benefits should be included in income tax.
That comes a year after Finance Minister Bill English’s so-called tax switch, which cut personal and corporate tax rates, while lifting consumption tax. The government also moved to clamp down on the use of property to limit tax bills, and removed the ability to claim depreciation tax benefits on buildings.
Revenue Minister Peter Dunne talked up the IRD’s clampdown on tax evaders, with $115.2 million of extra tax revenue. Last year, an extra $119.3 million was allocated over four years to help the tax department catch tax dodgers.
“In these difficult times, anything short of full compliance is effectively stealing from the honest New Zealand tax-payers paying their due,” Dunne said in a statement.
The government has a contingent liability of $297 million in disputed tax, and a contingent asset of $637 million in legal proceedings and tax disputes, the crown accounts show.