Fairness, integrity and growth – tax work programme outlined
29 October 2010
The Government’s updated tax policy work programme will support steps taken in Budget 2010 to rebalance New Zealand’s economy and strengthen growth, Finance Minister Bill English and Revenue Minister Peter Dunne said today.
“We want a tax system that tilts the economy towards work, investment and savings and away from the unsustainable borrowing, consumption and over investment in housing of the past decade,” Mr English said.
“The Government's 1 October tax changes took important steps in this direction and the tax policy work programme we are announcing today is designed to support this.”
The Government’s tax policy work programme is set by the Ministers of Finance and Revenue and released annually.
Releasing details of the work programme in a speech today to the New Zealand Institute of Chartered Accountants, Mr Dunne said tax policy had an important role to play in supporting a return to strong economic growth.
Mr Dunne also emphasised a continued tight grip on Government spending and prudent investment as measures that were positive for the economy.
The key components of the updated tax policy work programme are:
- continuing the delivery of Budget 2010 initiatives;
- the international tax review that continues reform in this area and the negotiation of tax treaties and tax information exchange agreements;
- supporting the Savings Working Group, including providing advice on recommendations and thinking broadly about the future in this area; and
- Transform IR, a project which will shape the way Inland Revenue and the tax administration system operates in terms of areas like tax secrecy, collection of debt and general governance.
“These four areas are central to the Government’s plan for lifting economic performance,” said Mr Dunne.
“Some of the key pieces of work under way include the review of depreciation fit-out, an improved disputes process, a review of the child support system, the integrity of social assistance programmes and flow-through income tax treatment for closely held companies.”
“In addition, some base maintenance work, such as profit distribution plans and the valuation of livestock has been included.”
The valuation of livestock project will review the ability to move from one livestock valuation method to another - such as for sheep, beef and dairy cattle. The project will consider the effectiveness of the rules that are designed to prevent movement between the valuation regimes and, in particular, whether it is too easy to leave the herd scheme.
“Officials will be providing briefings as appropriate and consulting on this in the coming months,” concluded Mr Dunne.
The text of Mr Dunne’s speech as well as the schedule are available at: www.taxpolicy.ird.govt.nz.