Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Improvements to GST financial services treatment


Improvements proposed to GST treatment of financial services

Banks, credit unions, life insurers and other financial institutions would be treated more like other enterprises and allowed to recover GST on purchases related to the supply of their services to businesses under proposals put out for discussion today by the government.

“The simplicity of New Zealand’s GST regime derives from its comprehensive coverage,” Dr Cullen said today. “Even so, when GST was introduced, it was decided that areas such as financial transactions could not be accommodated within normal GST rules, so they were made exempt.

“This exemption can penalise the finance sector because it can prevent them from claiming GST refunds so, after consultations with the industry, the government is now proposing to bring within the GST system financial services that are supplied to businesses.

“Time and international experience have shown that it is possible to zero-rate GST on financial services supplied to registered businesses, which is what the government is proposing. In practice, this means that financial services would still not attract GST, but suppliers of these services to businesses would be able to recover GST on the purchases related to them. We expect that this would lower the cost to businesses of using financial services,” Dr Cullen said.

“The financial services proposal complements an earlier proposal to charge GST on imported services. Under current law, imported goods, but not services, are subject to GST. The exception for imported services serves as an incentive for certain businesses to import services rather than acquire them locally. The government plans to introduce legislation relating to both proposals at the same time.”

“The discussion document also proposes a number of other GST changes in the financial services area, such as narrowing the definition of financial services,” Dr Cullen said.

The discussion document, “GST and financial services”, is available at www.taxpolicy.ird.govt.nz and www.treasury.govt.nz. The closing date for submissions is 6 December 2002.


© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Perils Of Declaring Premature Victory


Sure enough, Saturday’s Vaxathon was a barrel of fun and a throwback not merely to the Telethons of the past. It also revived memories of those distant days of early 2020, when we were all carefully wiping down our groceries, not touching our faces, washing our hands for 20 seconds and responding to level four lockdowns by putting teddy bears in the window for the benefit of the little kids walking by in their family bubbles. Those were the days, when the Team of Five Million felt like a real, organic thing... More>>

RNZ: Prime Minister Jacinda Ardern announces Cabinet decision on Covid-19 alert levels


Northland will move to level 2 at 11.59pm on 19 October. Waikato will be held at level 3, to be reviewed on Friday. Auckland will remain in level 3 with current restrictions for another two weeks... More>>

ALSO:




 
 

Economy: Inflation highest in over a decade
The consumers price index rose 2.2 percent in the September 2021 quarter, the biggest quarterly movement since a 2.3 percent rise in the December 2010 quarter, Stats NZ said today. Excluding quarters impacted by increases to GST rates, the September quarter movement was the highest since the June 1987 quarter... More>>

ALSO:


Government: New Zealand Increases Climate Aid Contribution

The Government is making a four-fold increase in the support it provides to countries most vulnerable to the climate emergency, Prime Minister Jacinda Ardern and Climate Change Minister James Shaw announced today... More>>

Government: Opportunity To Shape NZ’s First Emissions Reduction Plan
The Government is inviting New Zealanders to inform the country’s first Emissions Reduction Plan with the release of a consultation document containing a range of policy ideas to decrease the country’s emissions, Prime Minister Jacinda Ardern and Climate Change Minister James Shaw announced today... More>>

ALSO:


CPay Cheque To Pay Cheque: Half A Million New Zealanders Have No Savings
New findings from the Consumer NZ sentiment tracker found that 15% of New Zealanders had no savings, and a further 27% were anxious about their level of savings and would like to have more tucked away... More>>


Government: Mandatory Vaccination For Two Workforces

Large parts of two workforces critical to preventing the spread of COVID-19 will be required to be vaccinated, COVID-19 Response Minister Chris Hipkins said today. “Our education and health and disability workforces have done an incredible job throughout this pandemic to keep themselves and people safe,” Chris Hipkins said.... More>>


Green Party: Deeply Concerned Space Launches May Be Breaching Nuclear-free Laws

The Green Party is deeply concerned that space launches by Rocket Lab may be breaching nuclear-free laws, given our long-standing position as a signatory of the Nuclear Non-Proliferation Treaty... More>>


 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels