The budget position on tax is something of a watching brief. The Tax Working Group (TWG) was a tangible presence while the Budget was read but their interim report is not due out until September this year, their final recommendations coming out early 2019. In the meantime, the measures announced include:
• Ring-fencing investors’ tax losses on rental properties so they cannot be offset against other taxable income to reduce net tax paid
• Tax credits for research and development
• Changes to bloodstock tax rules for the New Zealand racing industry attracting new investment to the breeding industry.
There is a drive to widen the tax base. With that in mind, the Government will provide extra operating funds to Inland Revenue to collect more taxes and, in particular, to ensure outstanding company tax returns are filed. At a proposed cost of $31.3 million this is expected to raise revenues in excess of $183 million over the next four years. Taken with Inland Revenue’s tax policy work programme, there’s a strong compliance agenda to plug leaks and stop rorts to the system.
The message for businesses, of course, is to ensure tax compliance is a priority, all those i’s dotted, all those t’s crossed. Johnston Associates Tax team is here to assist you with all of your tax needs, contact us today.