Farmers in the newly declared drought zones will also be able to take advantage of the IRD's announced discretions to help provide tax relief
Revenue Minister Peter Dunne says he welcomes 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.
Today, Inland Revenue announced that it would extend its income equalisation discretions to farmers in the South Auckland, Waikato, Bay of Plenty and Hawke’s Bay provinces. Mr Guy yesterday declared these provinces to be in a state of drought.
“Clearly, the farming sector is fundamental to our economy, so I am very pleased that Inland Revenue is able to help affected farmers by exercising its income equalisation discretions,” Dunne said.
The scheme allows farmers to better manage peaks and troughs in their income by allowing money to be put aside from a better year and withdrawn against a not so good year.
Inland Revenue has decided to relax these rules by allowing late deposits from the 2012 income tax year to be made up to April 30 this year, regardless of when the 2012 tax return is filed or the due date for filing that return. Also early refunds will be allowed.
“Essentially, this will help farmers to better plan their cash flow planning at a difficult time,” Mr Dunne said. Details of the Inland Revenue response for drought affected farmers can be found here.
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