Tuesday 28 July 2009
Taxation (Consequential Rate Alignment and Remedial matters) - Te Ururoa Flavell, MP for Waiariki

Tenei te mihi maioha ki a koutou i tēnei wiki o Te Reo!

Hei tā Franklin D Roosevelt
“Ko ngā tāke te utu a te tangata kia whai turanga ia i roto i tōna ao rangimārie.

Koia na tāna korero, ā te pire nei, e whakahōuhia ai ngā paearu whai tūranga, i runga i ngā rerenga kētanga ki te Income Tax Act 2007.

He pire tēnei ki te whakatika i ngā ture e hāngai ana ki ngā reanga tāke e puritia ana, kia ōrite ki ngā reanga tāke o nai a nei.

Ko te Pire nei, e hāngai ana ki ngā rereketanga i mahia ai i mua; he whakahou hoki i ngā ture tāke.

No reira, kei te whakahōungia tēnei pire, te ture tāke mahi 1994, te ture tāke kai me te ratonga 1985, te ture tāke whakahaere tari 1994 me te ture Māori Trustee 2009.

E toru ngā wāhanga motuhake nei o tēnei pire hei aro tahitanga mā te Paati Māori.

Tuatahi ko te whakamāramatanga o tēnei mea te pākihi ngāherehere, kia tapirihia ko ngā mahi Permanent Forest Sink Initiative, nā, ko te PFSI, kia ōrite tonu te utu tāke ki ngā ngā kaimahi ngāhere katoa.

Kei roto nei te kupu whakamāhukihuki kia āhei ai te hunga Permanent Forest Sink Initiative ki te tuhi i ana utu hei ‘utu pākihi’ i roto i te kaupapa taake.

Kei te mōhio tātou o te whare nei, ko tēnei mea te PFSI he mahi tiaki i te taiao. Mā te whakatipu anō i te ngahere, e whiwhi ai te tangata, ngā piro whai-ao (emission units).

E ai ki ngā ture tāke o nai a nei, ahakoa e riro mai ai te kamupene ngā piro whai-ao, ehara i te mea ka whai mana hei pākihi ngahere.

Ko te raru ia, he pai ake ngā hua tāke o ngā pākihi ngāhere i ō ērā atu pākihi.

No reira, ko te rāwekeweketanga e kitea ana i roto i tēnei pire, he whakaae kia noho ai ngā PFSI hei pākihi ngāhere i rarō i te ture.

Nātemea e tika ana kia orite te utu tāke o ngā PFSI ki tā ngā pākihi ngāhere , kua tīnihia te tautahi o te “pākihi ngahere” i roto i te wahanga YA 1 o te ture Taake 2007 kia noho tau ai te PFSI i roto. Koinā te ahuatanga tuatahi.

Ko te ahuatanga tuarua o ngā rāwekeweketanga ki te ture Tāke Hokohoko 1985, kia utuhia te tāke hokohoko o te ‘kaupapa paranga’ i raro I te ture Whakakore Parahanga 2008.

He kaupapa nui tenei e whakatumeke mai i a mātou natemea 27 rā noa iho tōna pakeke, aa kei te rāwekewekehia anō.

Kei te hiahia au ki te whakarongo ki ngā kōrero o te Minitā mo ngā tāke, e whakamārama mai ana he aha i kore ai ia i aro atu ki ngā ahuatanga GST i mua i te whakamana i te Waste Minimisation Act hei ture.

Hei kupu whakamutunga – ko te take tino whakahirahira hoki – ko ngā rerekētanga e pā ana ki te ‘tāke pupuritanga’.

Nā te uaua ki te whai i ngā tohutohu maha o te tāke, i ētahi wā he ngāwari ake te mahi moni tūturu i te whakakīkī i ngā tono tāke!

Kei roto i tēnei pire reanga tāke pupuri hou i runga ake i tērā ka utu ake ia tangata, kia orite ki ngā rerekētanga ki ngā tāke ake a tangata.

Hei tā te pire nei, ki te kore te tangata e whāki i te utu tāke tika ki te pēke, ka 38% te rahi o te tāke e utua.

E ai ki ētahi, he huarahi nanakia tēnei ki te akiaki i te tāngata ki te tuku i te utu tāke tika mo te huamoni ka riro mai i ngā pēke.

He pai tonu ki a au i ngā kōrero o te māngai tāke o Deloitte ki Ōtepoti, a Peter Truman.

E ai ki a ia, ki te whakaturehia tēnei pire hou, ka nui atu te utu tāke ki runga i te putea tuku.

Hei tā Mr Truman i tātari ai, kei te patua-ā-pūkoro e te Kawanatanga te hunga e ngoikore ana ki te tuku i te reanga tāke tika ki ngā pēke, nā ko Ihu māngere rāua ko Ihu wareware tērā.

E ai ki ngā whēako o tēnei mātanga tāke o Te Tai Tonga, ko te rahinga o te tāngata kāore i te tuku i te reanga tāke tika ki o rātou pēke na, ko tērā te hunga ka patua e te pire nei.

Nā runga i tērā, me noho whakahirahira te rautaki whakatairanga o te Tari Taake, kia tae mārama, kia tae tika ngā tohutohu ki te hunga mahi huri noa i Aotearoa.

Kei te tautokona e mātou te pānuitanga tuatahi o te pire nei, i runga i te mōhio hei te wā komiti whāiti e puta mai ai te mātauranga, me te māramatanga.

Tenei te mihi maioha ki a koutou i tēnei wiki o Te Reo!

Franklin D Roosevelt once said that “Taxes, after all, are dues that we pay for the privileges of membership in an organized society”.

With this Bill, the membership form is updated, and the organised society gets a facelift, as consequential changes are made to the Income Tax Act 2007.

This is a catch-up Bill – a Bill which makes the necessary changes to certain withholding tax rates to ensure they align with recent tax rates and threshold adjustments.

The Bill catches up with earlier tax changes; as well as making changes to update tax law.

And so amendments are made to the Act, and also to the Income Tax Act 2004, the Goods and Services Tax Act 1985, the Tax Administration Act 1994, the Income Tax Act 1994, and the Maori Trustees Amendment Act 2009.

There are three features of this Bill in particular which the Maori Party wants to comment on.

The first aspect is the new definition of forestry business to include Permanent Forest Sink Initiative activities, so that all foresters receive the same tax treatment.
Basically it clarifies the state of play, so that the expenses of participants in the Permanent Forest Sink Initiative can now be treated as forestry business expenses for tax purposes.

The Permanent Forest Sink Initiative, as the House will be aware, is a climate change initiative in which a person intending to reforest can, in exchange for meeting certain conditions, receive emission units.

Under current practice, the earning of these emission units, may not always constitute a forestry business under the Income Tax Acts.

Whereas forestry businesses are entitled under the Act to more favourable tax treatment than other businesses.

So the simple change introduced in this Bill is that forestry business is now amended to include initiatives under the Permanent Forest Sink Initiative.

Since PFSI foresters should receive the same treatment as foresters who carry on a forestry business, the amendment defines “forestry business” in section YA 1 of the Income Tax Act 2007 to include PFSI activities.

The second area of interest relates to the proposed amendments to the GST Act 1985 to provide that GST is payable on the waste levy imposed by the Waste Minimisation Act 2008.

This is particularly of interest, in that it has only been 27 days since the new waste disposal levy was introduced and already we are changing it.

It would be interesting to hear from the Revenue Minister how the Waste Minimisation Act 2008 could have been passed into law, without the necessary adjustments such as GST being taken into account.

Finally, the last – and probably the most significant of all the changes is that related to the resident withholding tax.

Sometimes it appears as if more brain and effort is required in understanding all the tax compliance requirements in order to complete the income tax form than it does to make the income in the first place.

The Bill introduces new resident withholding tax rates on interest paid to individuals, to bring them into line with recent changes to personal tax rates.

In particular, the Bill introduces a new default rate of 38% for people who do not notify their bank of their correct tax rate.

The changes to the default rate are being described as a type of perverse incentive to motivate people to use the correct tax rate for the interest they receive from their financial institution.

I was interested to read the analysis of Dunedin Deloitte associate tax director Peter Truman.

It was his opinion that the tax changes being proposed by the Government would catch investors unaware, leaving them paying more tax on their investment income.

According to the analysis by Mr Truman, Government is increasing its tax take from those who are not motivated or organised enough to advise financial institutions of their correct tax rate.

In the experience of this Te Tai Tonga tax director, many New Zealanders did not get around to notifying their financial institutions of their correct tax rate and so may be unfairly penalised by the change in law.

It is for this reason that we think it is really essential that the Department of Inland Revenue plan out a top notch communications strategy to ensure the message gets through to all New Zealanders.

We will support this Bill at the first reading, and look forward to views about how effective the proposed changes will be, at the point of select committee.

ENDS

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