Hon Bill English

Minister of Finance

 

Hon Peter Dunne

Minister of Revenue

 

Wednesday, 9 June 2010

 

The Government is seeking public feedback on proposed changes to simplify

the tax system and make it easier for people to manage their tax affairs,

Finance Minister Bill English and Revenue Minister Peter Dunne said today.

 

The discussion document Making Tax Easier and an accompanying online

forum include ways of simplifying PAYE and income tax returns for individuals

and employers, Mr English says.

 

“Budget 2010 introduced a major rebalancing of the tax system away from

consumption towards saving and investment that will better support New

Zealand’s long-term economic growth.

 

“The Government is now looking to reform the way our tax system is

administered to make it easier and more certain for taxpayers to manage their

tax obligations.

 

The proposed changes also set out how people could self-manage most of

their tax and social assistance entitlements such as Working for Families,

using their own secure area on Inland Revenue’s website, Mr Dunne says.

 

“This would be done much like internet banking, making the whole process

easier, faster and more certain for taxpayers,” he says.

 

“At the same time, the Government wants to ensure that the tax

administration system operates efficiently and delivers value for money.

 

“The online consultation forum proposes several ways this might be achieved.

The main idea is to shift Inland Revenue’s current emphasis away from paperbased

systems towards greater use of customer-focused online technologies.

 

“To further simplify and reduce the number of interactions that individuals

must have with Inland Revenue, a new approach is being proposed, which for

some people would mean PAYE would be treated as a final tax.

 

“More timely and correct information would mean that tax is deducted at the

right tax code each pay-day, so there would be a reduced need for an end-of year

square-up,” Mr Dunne says.

 

“This would give people greater confidence that the amount of tax they pay

throughout the year is correct, with no unexpected tax bills arising at the end

of the year.”

 

For businesses, including employers and the not-for-profit sector, PAYE tasks

such as filing an employer monthly schedule could be managed by software

that automatically communicates with Inland Revenue.

 

“Such a move towards electronic technologies would require all businesses to

eventually move to electronic filing, Mr English says. “The Government wants

to hear from employers and businesses on these proposals.”

 

Similarly, the Government wants to hear from the software development

industry on how strategic partnerships might be developed to create the tools

to help employers move to an electronic environment.

 

The closing date for comment on the proposals is 23 July 2010.

Have your say on the online forum at www.ird.govt.nz/makingtaxeasier or

read the full discussion document at www.taxpolicy.ird.govt.nz

 

Media contacts:

Mark Stewart: 021 243 6985

Grant Fleming: 021 277 9869