Government in driving seat to simplify tax for businessRevenue
Treasurer Bill English and Revenue Minister Sir William Birch got in the driving seat today to speed up moves to make tax simpler for business.
"Our goal is to help New Zealand's businesses expand and prosper. Business people want to put more time and energy into their business, and less time into meeting, and worrying about, their tax obligations. We want to help them do that by making tax simpler for business," said the Ministers.
Mr English and Sir William launched two discussion documents, Less taxing tax and Interest deductions for companies. The launch was held at Black Arrow Industries, in Petone, Wellington, which is a small niche-market company making seats for sports and racing cars.
"These documents are the first stage of an ambitious project. We are aiming for a major simplification of the tax system - the small business equivalent of getting rid of tax returns for wage and salary earners.
"Some of the areas where we think we can make business tax simpler for small businesses in particular, as outlined in Less taxing tax, are: * reducing the incremental penalty for late payment from 2% a month to 1% * extending the use-of-money grace period from 15 days to one month * extending the existing serious hardship and financial difficulty relief provisions to all taxes * streamlining the payment of taxes so that most payments can be made on one day each month, and * removing the 'reasonable care' standard, leaving the 'gross carelessness' standard for all taxpayers who estimate provisional tax and have less than $35,000 residual income tax (currently $30,000).
"The second document Interest deductions for companies will be particularly helpful to medium-sized companies, who are often surprised at the detail of present law. The aim is to completely remove the significant uncertainty surrounding the claiming of interest deductions.
"Another related initiative to simplify compliance costs are the Small Business Test Panels, which were announced in the recent Bright Future package. The test panels will look at how proposed new laws will affect them and the first panel will be set up shortly.
"Businesses are a diverse group, have many different legal structures and are involved in a vast range of different activities. Making tax simpler for them, while at the same time ensuring the integrity of the tax system and its administration, will be a challenge.
"These documents are an important first step in simpler tax for business. We look forward to receiving submissions (closing date 26 November 1999) from a wide range of business people and being able to enact legislation as quickly as possible," said Mr English and Sir William.