Source: New Zealand Institute of Chartered Accountants – Inland Revenue’s Business Transformation should make tax simpler
Tax New Zealand Leader at Chartered Accountants ANZ, Peter Vial CA, says “this is a once in a generation opportunity to simplify and modernise New Zealand’s tax and transfer system and it’s pleasing to see this is what’s planned. The vision for our tax system needs to be world class, something that tax administrations in other countries benchmark themselves against and which businesses and taxpayers in other countries seek for themselves.
“This is a significant change and it will be a balancing act with the Government and Inland Revenue (IR) needing to juggle fairness, simplicity, efficiency and productivity growth but the end goal is clear – a better tax system for all New Zealanders that will enhance our future prosperity.”
Chartered Accountants ANZ is pleased to see that the Government and IR are aiming for a tax administration system that reduces compliance costs, speeds up processing so that far more tax administration happens in real time, and makes life easier for all taxpayers and recipients of social assistance.
The Government also needs to make sure that the future tax administration system is flexible and responsive enough to cope with the many changes to technology, business processes and domestic and international tax policy that will occur in years to come.
“What I’m really keen to see are rules and systems, particularly for small businesses, one of the backbones of our economy, that recognise that a ‘one size fits all taxpayers’ approach is not essential. In many situations a ‘near enough is good enough’ approach to tax compliance should be appropriate for individuals and small businesses.
“One hundred per cent accuracy may be ideal but it can make tax compliance time consuming and wasteful for people who just want to get on and run their lives and their businesses,” says Vial.
“We are looking forward to engaging with Government and Inland Revenue as the tax modernisation programme progresses. We’ll be working with IR throughout the process to ensure that the needs of taxpayers and business are met and that the ideas and solutions suggested by our members are incorporated into the reforms.”