Revenue Minister Todd McClay says taxpayers will get a chance to have their say on simplifying, modernising and transforming how they pay tax through a Taxpayer's Simplification Panel.
McClay says the Panel will be made up of people representing individual taxpayers, small businesses, and the tax advisory community.
“It is a chance for Kiwis to have their say on Inland Revenue’s processes, to tell us about the things that might frustrate them, and submit ideas about how things can be done better," McClay says.
A spokesman for McClay says membership and formation of the Panel will be announced within the next few weeks. The Panel will be managed by IRD and will report to both the Commissioner of Inland Revenue and McClay on a regular basis.
Here's McClay's full statement
Tax Simplification Panel to give Kiwis a say
Revenue Minister Todd McClay has announced the establishment of the Taxpayer’s Simplification Panel to give New Zealanders a voice in simplifying, modernising and transforming the way we pay tax.
The Taxpayer’s Simplification Panel will ask customers to submit their views on any aspect of tax compliance to find areas where Inland Revenue can make paying tax easier for taxpayers.
Part of the IR4U programme of better engaging with the public, the Panel will consist of representatives of individual taxpayers, small businesses, and also the tax advisory community.
“Increasingly Inland Revenue is a customer service focused agency and the Taxpayer’s Simplification Panel will be an important tool for taxpayers to interact directly with us,” Mr McClay says.
“It is a chance for Kiwis to have their say on Inland Revenue’s processes, to tell us about the things that might frustrate them, and submit ideas about how things can be done better.”
There are more than 3 million PAYE taxpayers alone.
“I am particularly keen that we engage with individual taxpayers and small-to-medium business owners about how we can reduce the amount of time they spend on red-tape and tax compliance.”
New Zealand has over 450 000 SMEs, which account for 97 per cent of all businesses.
“It is my view that currently small business owners are required to spend far too much time on tax compliance, which is time better spent on running their businesses.”
Inland Revenue’s ‘Save Time’ campaign for businesses in Hawkes Bay has already received 300 web or text submissions since going live on 7 May. The Panel will consider data gathered from this as part of its first tranche of work.
“The Panel will also be a valuable tool in further considering the modernisation and transformation of Inland Revenue’s business as part of our Business Transformation agenda.”
“The Taxpayer’s Simplification Panel will help Inland Revenue ensure they are consistent with the objective of making tax compliance faster and easier,” Mr McClay says.
51 Comments
YES , YES , YES , we have tax law that has been cut , pasted , chopped, changed , amended , and generally stuffed up by successive governments for the past 50 years .
Amendements have often been knee jerk to prior amendments that have created tax loopholes in their implementation
We need a simplified , fair , equitable , easy to follow , easy to understand , and easy to comply with TAX CODE.
Its quite simple really , wipe the board clean and start with a clean board / sheet/page whatever
Just do it
That's the silliest idea I've heard in a long time
The principal purpose of a GST is to capture the black economy without being too big
If you increased it to 35% you would incentivise tax evasion and re-introduce the black economy to the point it becomes as big as, if not bigger, than the lit-economy
I'd suggest that you can have a cash economy where ppl can avoid GST. I'd suspect its harder not to pay PAYE as when teh IRD catches your employer they will be in rather hot water to say the least.
On top of that as in the tradeables v non-traqdeables argument buying abroad and shipping in dodges GST and any other taxes/tariffs. Hence for me I suspect sales taxes are on a limited tiem frame.
A land tax however is a tax on a NZ asset, Im not aware of any method to dodge that? It also means that a non-resident property specultor paying no NZ tax gets taxed.
Ditto CGT, any non-resident should have to pay 15% CGT when selling up and taking the money back off shore.
regards
Anyone who wants the entertainment could see how far they can get suggesting getting rid of all other taxes in favour of a "Tobin Tax". Or, indeed, any of the other large scale reforms already ruled out. It is going to boil down to "how to get information from the IRD to cut down on time spent finding out about compliance" and so probably, some new website search feature.
You could start from a base of having zero taxes of any kind and then build up from there. The instant effect would be massive inflation; so arguably everyone's gross income should drop by say 40% to counter that. (So the same amount in the hand; adjusted to some extent for no GST and so on). The government could then just print the 40% extra to spend. They could have a 40% of GDP limit to spend each year. Still have all the income redistribution, free health, pensions, and so on. You might keep a few taxes like cigarettes and alcohol to dampen demand; maybe petrol as well.
Somewhat tongue in cheek; but the world has created a massive merry go round of money system. Pay you $100; take $40 off you so you have $60 to spend. Tax the spending as well. Give the $40 to the government so they can spend it. Now things like a gold standard have disappeared, but been replaced by somewhat disciplined central banks, this all could be short cut significantly. Tax avoidance would disappear. Whether Google paid tax in NZ or not would be a little irrelevant.
Getting there from here, including the 40% gross pay cuts, would be a challenge. I occasionally sit and dream though.
I have two options for a simplified taxation system. Both are based upon a land tax.
In both cases all existing taxes are scrapped and replaced by the land tax.
Option 1
At the moment my employer deducts taxes based upon my income.
That changes so that my employer will deduct my taxes based upon my land value.
Say I earn $100,000 and say I pay $30,000 tax which is deducted each week by my employer.
Now say I have a property and the land value is $200,000
My employer now deducts my taxes as if I were earning $200,000 so now I would pay say $60,000 tax deducted weekly by my employer.
Of course the tax could be a flat tax of 10% or a graduated tax system or whatever.
Option 2
New Zealand has a land area of 268 billion square metres.
The government, without exception taxes All land at 25 cents per square metre. That gives the government an income of $67 billion
Of course the government would have to compensate the likes of The Department Of Conservation. But this would be done through the budget.
This tax would be in addition to the tax in Option 1.
Once the new tax came in all other taxes would be abolished and all citizens and permanent residents 18 years and over would receive the Big Kahunda. This Kahunda would cost the government about $20 billion.
WINZ would be closed down and all State Houses sold.
The is just a quick version
I think its more than $100 a week...
The problem I have with it there is then no incentive to work I can see...so as far as I am concerned im reluctant to do anything that boosts weekly paid benefits. Now higher dental payments, emergencies etc, yes....they would be as a proven need however.
regards
A big problem with a land tax is that we have a history of Money supply growth.. ie. the debasement of the purchasing power of money.
Just so happens that Land is a far better measure of this process than is the CPI.
If we continue to have 6% M3 money supply growth.... then over time we will have about 6% growth in land values...all things equal ( its not just supply/demand that make land prices go up...but, largely, it that the value of money goes down )... ie. the unit of measure is not a constant.
The biggest problem is that wages and salaries don't grow at the same rate as the decline in purchasing power..
SO... over time , we will find most people appear to be asset rich but income poor...... Or for the next generation asset poor and income poor.
Thru out history.... the debasement of a Monetary system has been considered a form of Taxation and/or wealth transfer.... and it is..
And we wonder why the division of wealth is becoming more extreme..???
I'm in favour of a land/resourse tax ...together with a stable Monetary system (no increase in money supply )... and no income tax.
IF we did need to increase the money supply to try and "manage "... it should be in the form of a universal payment to all people... ( for it to be equitable).
Just my ideas...as I fly by the computer and go to work.
ALSo... User pays... I think roger Douglas brought this in... At first glance a great idea.. BUT.. the higher order effects (unintended consequences) has been a subtle form of corruption... where these regulatory departments have morphed into "business entities, that serve 2 masters"... that charge and suck.... This IS a form of taxtaion... They produce NOTHING and are an expensive layer of compliance that gets deeper as time goes on... Time for common sense and a relook..???
LESS public sector = less tax... hows that for an idea..??
I will throw in Keith Ng's visualisation which has links to data in it.
http://publicaddress.net/keith/budget2014/Stairway.html#0-0-9
To a large extent, I personally think the income measures are not sensitive enough to have a meaningful debate in NZ, we know from international researtch that the top 1% is actually seeing a lot more benefit than the top 10% and the top .1% are gaining massively internationally. We in NZ are not breaking down our figures enough to get a really good handle on it. In this case "record" means "a bit of movement in the average of the upper decile which is being generated by increases in the upper limit of the decile" (since nothing is moving lower down, mathematically the average is getting dragged up by a few high end points getting much higher).
Not seeing anything in there which supports the assertion that "the division in wealth has become more extreme". On the contrary, it suggests that income inequality in New Zealand has remained pretty stable through the period covered by the charts, and also that inequality is reduced through the tax system.
It matters a great deal that some people remain in poverty (the charts tell us nothing about how far this is the case - there will of course always be lower deciles, but what matters is whether the same people are always in it). Attention should focus there, not on envy and spite towards the most successful.
From that chart
Since 2008 (Government's starting point not mine) Decil 5 annual average houshold income up 167 dollars 10 cents (0.8%). Decil 6 average annual household income down $23 dollars 30 cents (-0.1%). Decil 10 average household income up 5600 dollars (+4.6%). Because Household income is a measure bounded at the lower end but not the upper, the top decile gets affected by a subgroup of that top decile getting greatly accelerated gains which is averaged over the entire top decile. This is increasing inequality. It has moved in a direction of being more extreme. I did not say it was extreme.
Now, the bottom and middle are moving together (strictly speaking decils 1 through 7) and that increasing similarity between the people at the very bottom and the people in the middle balances out the very rich getting a lot richer when you calculate New Zealand's overall inequality.
You seem effectively to be defining "inequality" as the relationship between the very richest and everybody else. That's one way, certainly, but the Gini coefficient is I think more widely recognised as a more comprehensive and meaningful measure and that hasn't changed in NZ for several years.
Now now dont cherry pick, in the 80s and 90s it changed substantially and for the worse. Sure its pretty flat now, says a lot for WFF as a success I suspect.
Looks so,
http://igps.victoria.ac.nz/events/Inequity%20Forum/InequalitySummary_Br…
regards
I'm talking in a Global context , in regards to division of wealth... and I can't point you to the evidence.. but will try to find something for you
This is based on my 40 yrs of following economics and mkts, being widely read and from my own understanding of Global Monetary Systems.... so yes... its my view and its somewhat anecdotal.. ( I never kept the evidence and research that i came across).
In my view, one of the disturbing trends of Western Capitalism has been the concentration of wealth in fewer and fewer hands... one of the failings of our version of Capitalism.
Im sure goggle would come up with plenty.... I think the UN did some research.
Like I say... It's my view based on a lifetime of following economics and economic thinkers and the changing fashions in economics....as well as observing the realities of everyday life..
If you are concerned about the global distribution of wealth, what exactly do you think a reform of the New Zealand tax system should do about it?
If there were to be a truly global evening-up of wealth every single New Zealander would be a net loser. Is that what you want?
Are u a lawyer or something.??? Talk about twisting the context of what I was talking about. We live in a global world...NZ has open financial borders... Our economic and Monetary systems are the same as most other Western Countries...
My comments are about NZ...and the only reason I brought up the Global context of the division wealth was in response to you asking for specitic, NZ data.
At some point there will be what u call ..."an evening up"... but that not an answer. ( no coincidence that Thomas Pikettys' economics book is a best seller).
Any reform of the NZ tax system should be fair and equitable.... I don't think that taxing labour ... PAYE ...is the best and fairest form of tax. If we did not tax labour would people work longer and harder..???
What would you suggest...??? keep things as they are..??
Your comments are about NZ and the only reason you brought up global wealth distribution was because I asked for specific NZ data? How does that follow?
No, our economic and monetary systems aren't "the same" as most other Western countries. We have, for example, a more generous minimum wage, a completely different approach to pensions provision, and a much heavier dependence on primary production compared to other "Western" countries. We have a simpler and broader-based tax system than most, we are especially small and distant from other markets and have a unique constitutional relationship with the aboriginal population.
We should not start an examination of New Zealand's tax system on the basis that New Zealand's problems and challenges are the same as everybody else's, and certainly not that addressing inequality in global wealth distribution should be an objective of the New Zealand tax system.
I dont agree on land price v CPI. CPI can have bubbles? no not really, can land? yes.
Besides which I dont like CPI much either, I prefer core inflation.
User pays is laughable, the right wingers only want it when it allows them to avoid having to pay it, when they have to pay it...it isnt good.
Less public sector = less tax? not overall, in fact the impact is worse on GDP. For instance yes sure lets say we dump the public health system, then we'd have to pay considerably more for health insurance or if too poor have none. The effect in the US can be seen, twice the suck on GDP, for less ppl and a worse outcome...
Education? ditto...OAP? ditto...
Its not an idea that hasnt been thrown around for many decades and well got no where and for good reason.
regards
The problem I have with your option 1 is its collected via PAYE. If I dont work as such then I pay no PAYE tax. So if you have a land tax (which I suspect is the way to go) it should be collected via the rates and cant then be dodged by landlords of foreign investors. The tax base would then be broader and PAYE could be dropped so for most ppl the change would be neutral.
Big Kahunda is a possibility...
regards
A completely new tax system is needed and an Automated Payment Transaction Tax System should be seriously looked at.
An APT tax system is efficient for everyone as there are no tax returns of any type required,
- All transactions pay the tax regardless as there are no exceptions,
- As it is automated the tax can go straight to the Government,
- it is broad-based as it captures every transaction regardless of the type of transaction,
- Captures off-shore investors/business's undertaking transactions in NZ,
- As it is a flat rate on each and every transaction it does not differentiate between business and/or activity,
- Level playing field across all investment types and spending.
- It is efficient for all parties.
- Would reduce lobbyists who are after special tax concessions for a particular industry.
- Business would become highly efficient as they concentrate on the essentials.
RBNZ would probably need to periodically issue newly designed currency.
I think an APT tax is an improvement on a Tobin Tax.
I don't think regressive taxation is a problem as long as it's only a part of the taxation system. If you coupled notaneconomist's proposal for a regressive transaction tax but coupled it with a UBI or similar then it wouldn't be too difficult to have a taxation system that rewards effort but doesn't leave people totally out to sea when they lose their jobs. Like MdM said, inequality isn't so much of a concern but getting those who are down on their luck support and a leg up is.
Choosing the simplest possible combination of UBI and a flat tax on all income, you could be fiscally neutral with a 37.5% income tax and an $8400 a year UBI, for example ($700 per month).
I gather you're not a huge fan of UBIs, but I think we already implicitly guarantee citizens minimum basic income through benefits, only the way we do it now causes a lot of s**t for both the providers and the receivers while creating big distortions at the botom end of the labour market. I think we stand to gain a lot by removing those distortions and moving to a system that requires virtually no bureaucracy
Steven - if you take the time to read the following article ( there are several more available if you do a quick google search) it might help to inform you a bit more on APT....
http://www.academia.edu/5305083/The_Automated_Payment_Transaction_APT_T…
Personally I think you are incorrect on both your statements above but I do not have the time or inclination to be bothered explaining to you.
"Such a uniform tax might not,on its face,look progressive,but probably would be sincethe volume oftaxed transactions wouldalmost certainly rise disproportionately with personal income"
I mean "probably would be" so we are to look at something that is a profund change on, um, some assumptions.
I think not.
It is essentially looking like a regressive taxation scheme...
I think not.
"cant be bothered"
Like I care about the Libertarian perspective.
regards
Great idea to have a revue on tax.The only concern I have it will be like the "Constutional Revue Panel" Stacked with Left wing Part Maori academics,and Racist Activists who did not listen to the overwhemling submissions tendered and twisted their report to the Government who are seriously lacking in intestinal fortitude.
We need to have a legally binding referendum system brought into this country for all major reform like the tax system,because sucessive governments do not listen to the silent majority ,who are working hard ,and paying their taxes only to watch government squader the money on the losers and noisiest activists in society, otherwise we are stuffed .
Greg Cuttance
You are wrong on "silent" and "majority" IMHO, or can you prove it? What I see is a tiny minority with views such as yourself making considerable noise. The silent majority gets to vote every three years and it seems a system roughly like we already have is fine by them.
regards
Great idea to have a revue on tax.The only concern I have it will be like the "Constutional Revue Panel" Stacked with Left wing Part Maori academics,and Racist Activists who did not listen to the overwhemling submissions tendered and twisted their report to the Government who are seriously lacking in intestinal fortitude.
We need to have a legally binding referendum system brought into this country for all major reform like the tax system,because sucessive governments do not listen to the silent majority ,who are working hard ,and paying their taxes only to watch government squader the money on the losers and noisiest activists in society, otherwise we are stuffed .
Greg Cuttance
Steven
I am saying that there is a whole lot of stuff going on in the background in NZ which is extremely undemocratic.By the silent majority I mean hard working Tax paying Kiwi's who are too busy to notice what is going on so they become apathetic.Sure they vote every 3 years but if we had a law that a referendum was binding on the government we would be fully democratic.eg Tougher penalites for crims 95% for it the government ignored it.
To quote another example ,the current government is trying to reform the growth retardent called the resource management act.But no progress can be made with this because last week the Maori Party and the Peter Dunn party would not support forward thinking amendments to it.
These parties combined represent 2% of our voting population.Talk about the tail wagging the dog.
Ok, well I can see your views are somewhat right of Act, so not even 1% let alone 50%+ So lets be clear I od not see how you do not talk for the so called silent majority.
RMA< well I dont think you have any right to asume a "majority" are "blind" they just dont share your extremist views. The RMA is a classic example of many NZers not wanting it neutered, the Pollies outside of National saw that and didnt go there. If you add the Green's, labour and all the other parties together they out % National, so its not 2%.
On top of that you cannot have growth for ever on a finite planet, all you do is ruin the planet...
Tail wagging dog? sounds like that is more wish frankly.
regards
Steven it is a minority who want the RMA not the majority.
- What benefit does the RMA actually offer?
- Have you ever actually read the RMA or had to go through any process involving the RMA?
I have pointed out to you previously the "purpose" of the RMA (please at least read that part) and then consider if the purposes are actually met. You need to understand that the costs of the RMA are astronomical for those who have to use it.
The RMA is a real burden on productivity as the total amount of capital employed on any project is significantly increased. You often go on about the debt loading in NZ without understanding where many of the increased costs (which add to total debt) actually come from.
The RMA is a useless, expensive piece of legislation which is horrendously costly to administer, very inefficient, gives power to a few people in planning departments who have no experience in business, is open to abuse by people opposing applications (think of NIMBY's). I can't understand why you use the finite planet argument as a reason for keeping the RMA when it squanders resources by not allowing efficiencies to occur. Surely if you're highly concerned with finite resources you would want to see those resources used efficiently! Yet you maintain a position of keeping inefficiencies within the system.
- Please explain your definition of ruining the planet?
- Also do you have an holistic view on your definition?
- Or are you merely looking at components in isolation?
I look forward to your responses to my questions which I have used bullet points for your ease.
Can you prove that on the RMA? Because apart from teh % supporting National and I assume Act you hardly have any proof that the majority support neutering the RMA.
The RMA protects our environment from over-exploitation. Simple the RMA protects the environment that NZers enjoy, hence the costs to comply to it is a cost to business to work to the RMA, dont like it, dont do the business.
Yes I have read the RMA principles and I agree with it. As an out and out exploiter yes I can see you consider it "useless" however I do not, cast your vote come election time.
regards
Yes, the RMA was meant to gauge everything by Effects. But the old crew of ineptocrats, accustomed to the spatial palnning of the Town and Country Plaanning Acts of yore, prompotly started administering the whole shebang as though the old Acts had continued.,
The effects of their ineptitude(which, let us not forget, started in the early 90's - which by no coincidence was the RMA introduction, the amalgamation mania in TLA's, and the economic changes wrought by Labour) are the root cause of many of the economic distortions we now see: a by no means comprehensive list:
- The rise and rise of the Rural-Urban land cost differential (see the Productivity Commission for their attitude to this)
- The rise of average section prices (MUL/RUB effects excluded) because of the RMA consenting process
- The rise in average section prices (excluding MUL/RUB and consents) via Development Contributions.
- The rise in average building costs occasioned by the time injected into every regulatory process (thanks, Consultation ): to all except the ineptocrats, time=money
- The rise in average building costs occasioned by a general risk-averseness (think OSH, working at heights, fencing of sites, electrical appliance certification, fall protection, yada yada, not a single one of which existed 20 years ago)
A few thousand here, a few thousand there, pretty soon it adds up to real money.....
And the value-add from all of this to the average house? I'd estimate That at close to zero. The ongoing rate of change in materials and componentry (bare alloy framed single glazed windows, to thermally-broken frames and double or triple glazed panes is a classic example) would have occurred anyway.
Inefficiency up the wazoo.....
Binding referenda would be a nightmare. The average Joe is surprisingly uninformed about most things. I would go as far to suggest at least half the population are to uninformed to vote but realise that, apart from setting an uneasy precedent, deciding who is considered informed enough issue by issue would be impossible anyway.
You are allowed to have your say but must realise in a democracy people can point out your stupid ideas.
As far as your comment the tail wagging the dog, if NZ had given National a mandate to govern alone then you could have your way. However the people voted for what we got and so National can't just ram things through unlike in the good old FPP system.
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