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[Proposed Tax Reforms Could Cut Tax Costs By a Third ]
The New Zealand Institute of Chartered Accountants and Tax Management New Zealand have today released a report titled ‘Simplifying The Taxation of Small Business in New Zealand’ which recommends significant changes to the way tax compliance is managed by small businesses, potentially cutting costs by up to a third.
Designed to gain the input and support of stakeholders before a final proposal is submitted to Government next year, the report highlights the current disproportionate time and cost small businesses face managing tax.
The intended outcome of the final report to Government is to propose a radically new system whereby businesses can comply with their income and GST tax requirements in only one hour per month and one in which tax revenue is not compromised.
New Zealand Institute of Chartered Accountants Chief Executive Terry McLaughlin says, “The tax regime in New Zealand has become increasingly convoluted, meaning small business owners are spending more and more time trying to keep up with complying with Inland Revenue requirements rather than developing their businesses.
“This proposal outlines a new, simplified tax system that is easy to understand and easy to comply with and identifies two categories of small business, measured by turnover. We have created two proposals; one for Micro Businesses earning under $60,000 per year and one for Small Businesses whose turnover is less than $1.2 million per year. We estimate we could reduce the costs of tax compliance for these businesses by up to a third,” he says.
Ian Kuperus, Managing Director, Tax Management New Zealand, says, “We have also launched a new website www.smetax.co.nz to inform and create public discussion about the proposed new tax system. Over the following months, we will be seeking feedback on the Micro and Small Business tax proposals from policy makers, policy groups, small business owners and accountants in order to create a final, all encompassing report for Government.”
To read the report and have your say about ‘Simplifying The Taxation of Small Business in New Zealand’, please go to www.smetax.co.nz.