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Budget 2013 will provide relief for six areas of ‘black hole’ business expenditure, bringing in tax deductibility on items where it previously has not applied, Revenue Minister Peter Dunne says.

“Some of it will be deductible immediately, and other items over time, but it all continues the Government’s focus on providing an environment that supports business,” Mr Dunne says.

A number of situations where black-hole expenditure may occur had been raised by businesses, and as a result, the six proposed changes are:

The Government is aware of financial institutions’ compliance concerns about the FATCA tax information exchange agreement being negotiated with the United States and is looking at options to help alleviate some of these concerns, Revenue Minister Peter Dunne said today.

FATCA – the Foreign Account Tax Compliance Act – is US legislation requiring non-US financial institutions, such as banks, life insurers or managed funds, to provide the US Internal Revenue Service and US Treasury with information on their dealings with US clients.

The latest student loan statistics show that the gap between the repayment rates of New Zealand-based borrowers and overseas-based borrowers continues to grow, despite overall lifts in the number of people paying off their loans.

Overseas-based borrowers make up 60 per cent of the 84,562 borrowers in default as at March 31 this year, despite comprising only 15 per cent of the borrowing population. They are responsible for 82 per cent of the $520 million currently in default.

Cabinet has told Inland Revenue to work on the next stage of major, long-term systems changes that will deliver new, streamlined services for New Zealand individuals and businesses, Revenue Minister Peter Dunne said today.

He said Cabinet has approved in principle the case for major change at Inland Revenue and asked officials continue with the work.

“It will be a substantial and complex project on a very large scale.

Revenue Minister Peter Dunne has welcomed the release today of a tax policy officials’ issues paper exploring options to reform the rules around land-related lease payments such as lease transfer payments and ‘key money’ payments.

The paper, The taxation of land-related lease payments suggests rationalising the current rules by introducing generic income, deduction and timing rules for all land-related lease payments.

A tax penalty implemented as part of the company tax rate change is likely to be repealed, Revenue Minister Peter Dunne announced today.

Parliament’s Finance and Expenditure Select Committee is considering repealing the transitional imputation penalty as part of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Bill, Mr Dunne said.

The penalty, which applied as at 31 March 2013, is designed to stop deliberate over-imputing of dividends at 30% (instead of 28%) during the two-year transitional period.

The latest report on international progress in reviewing the taxation of multinationals shows New Zealand is well placed on the issue, Revenue Minister Peter Dunne said today.

The Treasury and Inland Revenue officials’ report on the OECD’s base erosion and profit shifting (BEPS) work takes stock of New Zealand’s rules and provides an update on its continuing work.

Inland Revenue successfully pursued 1170 cases for just short of $200 million in evaded taxes in the two years to June 2012, Revenue Minister Peter Dunne said today.

“I trust these figures will end the bizarre fiction from Labour that the Government is tough on welfare fraud, but soft on tax evasion,” Mr Dunne said.

The purchase and use of kava will be completely unaffected by the Psychoactive Substances Bill currently going through Parliament, confirmed Associate Minister of Health Peter Dunne.

The Bill makes a number of exclusions for products already regulated by other pieces of legislation such as alcohol, medicines and tobacco. There is also an exclusion for food.

When used traditionally kava is regulated as a food under the Food Standards Code and the NZ Food (Supplemented Food) Standard 2010 when it is a drink.

Good morning.

Thank you for inviting me to join you once again.

It is a pleasure to be here as I always find your conference programme very informative.

There is a direct link between tax policy and the work that you do and this gives me confidence in the way that we develop tax policy in New Zealand.

The policies that I announce as Minister of Revenue will (all going to plan) in due course become law and people come together here to discuss their implementation.

The Government is seeking public feedback on proposals for Inland Revenue to share some information with other government agencies to help fight serious crime, Revenue Minister Peter Dunne, Justice Minister Judith Collins and Police Minister Anne Tolley announced today.

Revenue Minister Peter Dunne today welcomed the passage of the first major reform of the child support regime since it began over 20 years ago, saying the 210,000 New Zealand children dependent on the system would benefit from the updated law.

“The passage of the Child Support Amendment Bill in Parliament this evening is the culmination of work I began six years ago now to review and modernise the operation of the child support system.

A Bill allowing Inland Revenue data-matching with Customs to identify and locate serious student loan defaulters as they return to New Zealand passed its third and final reading in Parliament this afternoon.

The Student Loan Scheme Amendment Bill No. 2 also broadens the definition of income, bringing it into line with the definition used for Working For Families tax credits and other social policy programmes, from 1 April 2014, Revenue Minister Peter Dunne said.

Two important changes to increase KiwiSaver contributions take effect from 1 April, which will help to encourage a higher level of private savings among New Zealanders, Finance Minister Bill English and Revenue Minister Peter Dunne say.

From next Monday, the minimum employee contribution rate will rise from 2 per cent to 3 per cent. At the same time, compulsory employer contributions will also rise from 2 per cent to 3 per cent.

The Government will not continue with a proposal which would have changed the way some employer-paid carparks in central Auckland and Wellington are treated for tax purposes, Finance Minister Bill English and Revenue Minister Peter Dunne say.

“The proposal was made as a matter of fairness, because in general we consider that cash and non-cash benefits should be taxed the same way,” Mr English says.

With the entire North Island now declared to be in a state of drought by Primary Industries Minister Nathan Guy, Revenue Minister Peter Dunne today welcomed Inland Revenue’s decision to further extend its income equalisation discretions to drought-stricken farmers.

“I am pleased that Inland Revenue is helping out in these very difficult circumstances by extending its discretions to all drought-affected farmers,” Mr Dunne said.

Good morning.

It is a great pleasure for me to once again address an IFA conference and to have this opportunity to share my thoughts on taxation issues with you.

This is the eighth time I have had this privilege, and certainly I regard this annual event as an important opportunity to outline the taxation work programme and government thinking for the year ahead and beyond.

And I always look forward to learning about your thoughts.

Good afternoon.

Revenue Minister Peter Dunne today welcomed Inland Revenue’s decision to extend its income equalisation discretions to drought-stricken farmers for the second time in a week.

Last Friday, discretions to help provide tax relief were announced for Northland farmers after Primary Industries Minister Nathan Guy had officially declared a state of drought in Northland earlier in the week.

Revenue Minister Peter Dunne today welcomed Inland Revenue’s decision to exercise its income equalisation discretions to help provide relief for Northland famers hit by the current drought.

Primary Industries Minister Nathan Guy officially declared a state of drought in Northland on Wednesday.

Mr Dunne said that he fully appreciates that farmers will have other more urgent issues on their minds than tax right now.

The Child Support Amendment Bill, which proposes major reforms to make the child support system fairer, had its second reading in Parliament today.

Revenue Minister Peter Dunne welcomed the bill’s progress, saying it was another step closer to modernising and improving the child support system for thousands of children and parents.

“There has been huge public interest in the proposed reforms since I first announced a review of the child support scheme and released a government discussion document outlining proposals to improve the scheme.

Revenue Minister Peter Dunne today welcomed the release of an OECD report which calls upon member countries, including New Zealand, to develop a shared response to the question of taxing large multinational companies.

“The issue of large multinationals shifting their profits to countries in order to gain the most favourable tax result is of huge importance to OECD member states who are concerned about how this practice can distort and erode their respective tax bases,” Mr Dunne said.

New Zealand will be strongly aligned with the OECD in tackling the issue of fairly taxing multinationals, Revenue Minister Peter Dunne said today.

He said transparency was important in New Zealand operations generally.

“It is part of the Government’s better public services work and as part of this work, there has been on-going consideration of the role of tax secrecy and how to retain its important principles, yet actually achieve what we need to in a complex financial and corporate world,” he said.

Revenue Minister Peter Dunne today praised Telecom for leading the way for large corporates in supporting payroll giving, as the Telecom Foundation hit $1 million in donations to New Zealand charities, schools and community groups.

“Telecom and the Telecom Foundation have shown the way on payroll giving since they came on board with the scheme 18 months ago,” Mr Dunne said.