New tax proposals impact interaction with IRD

New tax proposals impact on how individuals and business
interact with IRD

Paul Dunne, Senior Partner at KPMG, says that business and the community should pay close attention to two discussion documents released today. The Government is asking for public feedback on wide-ranging proposals to simplify the NZ tax system. The stated aim is to make IRD fit-for-purpose in the 21st century.

The discussion documents outline the Government’s plans for how IRD will interact with business, individuals and the wider community, in future, as well as changes to two important tax bases – PAYE and GST. This kicks off what will be a series of consultations on the NZ tax system, over the next 12 to 18 months, says Dunne.

“It is critical that people understand how IRD plans to administer the tax system in future, as this will impact taxpayers’ rights and obligations.”

The focus is on greater electronic communication. This means changes to how individuals and business communicate information to IRD and how this information is used.

“For individuals, this will mean greater pre-population of tax return information by IRD. But to do this, IRD needs more accurate data from employers and others”, says Dunne.

“So for business, the plan is to integrate PAYE and GST directly into a business’s payroll and accounting systems. This will allow IRD to get PAYE and GST information from business in real time.” Other withholding systems are likely to follow suit, according to Dunne.

This raises questions around the integrity and security of taxpayer information, held by IRD and third parties, and how and when it will be shared. This is topical given recent cases of data breaches, both in New Zealand and overseas.

The Government is asking for feedback on these issues. It is important that business and the community engage, says Dunne.

• For further information, please refer to the attached copy of KPMG’s latest TaxMail newsletter, released today.

ENDS

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