Till 3.50pm Thursday 17 November 2016
[At 3.50pm today Tax Management NZ Chief Executive Chris Cunniffe will speak at the NZ Tax Conference
in Auckland on the survey’s findings.]
Taxpayers need more information on impending tax transformation - Chartered Accountants’ survey
Chartered Accountants believe Kiwi taxpayers need more information about Inland Revenue’s upcoming transformation of the
way tax is paid.
The annual survey of Chartered Accountants’ satisfaction with Inland Revenue (IR), out today, also reveals concerns
about increased use of technology to provide real-time tax information to IR.
The IR Satisfaction Survey, commissioned by Chartered Accountants Australia and New Zealand and Tax Management NZ, this
year asked Chartered Accountants (CAs) in public practice and corporates for their views on IR’s new tax administration
system – called Business Transformation – along with some of the business tax changes currently before Parliament.
Nearly seven in 10 public practice CAs surveyed have doubts about taxpayers’ readiness for Business Transformation, says
Chartered Accountants ANZ New Zealand Tax Leader Peter Vial.
“These views are from the coal face of the tax system as many CAs in public practice work with small and medium-sized
Respondents also raised concerns about providing real-time information to IR and taxpayers’ financial systems ‘talking’
directly to IR’s systems. They are worried about how accurately taxpayers will input information and their lack of
access to compatible technology.
Chartered Accountants in both public practice and corporates want more information about Business Transformation from
“The demand for more information is consistent with respondents’ concerns about taxpayers’ readiness for the new tax
administration system,” says Mr Vial.
“IR needs to provide more information on how it is transforming the tax administration system and communicate more
effectively about the implications for taxpayers. This will ensure a smoother transition to the new system.”
Business Transformation aims to simplify and streamline IR’s business processes, policies and customer services as well
as upgrade its technology. Changes will be introduced incrementally from next year.
The survey also asked Chartered Accountants ANZ members about the new provisional tax calculation method, the accounting
income method (AIM); awareness of upcoming changes to withholding tax; and the level of comfort with IR being able to
share information more widely.
Tax Management NZ Chief Executive Chris Cunniffe says more may be required to encourage uptake of AIM after less than 50
per cent of respondents indicated they would use the method when it comes into effect on 1 April 2018.
Under AIM, taxpayers with turnover of less than $5 million, and who use IR-approved accounting software, will be able to
pay provisional tax every two months based on profit for that period. No use of money interest will be charged if
payment is made on time.
“While most Chartered Accountants agreed that AIM would provide certainty around provisional tax, they are less certain
that it will reduce compliance costs,” says Mr Cunniffe.
Mr Vial says there is little awareness so far about the changes to withholding tax and IR being able to share
information more widely with credit agencies and the Companies Office. But with those changes coming into effect from
next April, he feels there is time for IR to “embark on an intensive education campaign” to explain the new rules.
In terms of overall satisfaction, the number of CAs who have had a positive experience when dealing with IR in the last
12 months has increased by 2 per cent. However, this has been offset by a 2 per cent increase in those who have had a
less than positive experience.
As was the case last year, respondents would like IR to improve the consistency of information provided by its call
centre staff and the ease of finding the right person to talk to about a technical issue.
The areas of audit and processing showed significant improvement.
IR’s auditors are responding more promptly to issues and considering more fairly issues raised by taxpayers, while
digitalisation of the tax administration system has resulted in more accurate processing and fewer errors, says Mr Vial.
The IR Satisfaction Survey was conducted by Colmar Brunton between 4 and 24 October.
It has a margin of error of plus or minus 4.5 percent.
Chartered Accountants ANZ has shared these results with IR.
About Chartered Accountants Australia and New Zealand
Chartered Accountants Australia and New Zealand is a professional body comprised of over 117,000 diverse, talented and
financially astute members, including 30,000 in New Zealand, who utilise their skills every day to make a difference for
businesses the world over.
Members are known for their professional integrity, principled judgment, financial discipline and a forward-looking
approach to business which contributes to the prosperity of our nations.
About Tax Management NZ
Tax Management NZ’s mission is to create a better tax environment. As New Zealand’s first and largest tax pooling
intermediary, we have worked alongside many of New Zealand’s top 200 companies, state-owned enterprises, fund managers,
major banks and thousands of small and medium sized businesses to better manage their provisional tax obligations and
mitigate their exposure to IRD interest.