TAX NEWS - June 2010
New Zealand Tax: Panel to hear GST rise technical concerns
Revenue minister Peter Dunne told the finance and expenditure select committee that the GST Advisory Panel would act as a conduit between business and the Government.
Tax accountants have said larger firms and retailers with complex computer systems could struggle to meet the October 1 deadline when GST will increase from 12.5 per cent as part of broader tax changes announced in the Budget last month.
A dedicated website would also be launched as well as an 0800 freephone number.
"There have already been a number of issues that have cropped up that have come from the business community that will be on its agenda," Mr Dunne said.
The panel could also make recommendations to the government about the amendments or alterations to technical provisions that might need to be incorporated in legislative change.
The panel, chaired by former KPMG chairman Frank Owen, would be in place till the end of the year.
Mr Owen said the first meeting would set the terms of reference for the panel.
Mr Dunne said the IRD had a busy year including settling the country's biggest tax avoidance case involving the big banks, worth $2 billion.
The High Court last year found that some huge foreign loans by Bank of New Zealand and Westpac were tax avoidance.
Following the two separate judgments the banks moved to settle the case, which had been expected to be appealed all the way to the Supreme Court.
IRD commissioner Bob Russell said the settlement was for 80 per cent of the tax owing plus interest, but without further penalties.
However, Green Party co-leader Russel Norman yesterday questioned the fairness of the settlement when much smaller taxpayers were dealt with more harshly.
"They illegally avoided paying $2 billion in tax and they paid no penalty."
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