1 July, 2002
Compliance Cost Reduction Initiatives Well On Track
Steady progress is being made to reduce compliance costs for businesses by implementing initiatives in the discussion
document “More Time for Business’ and the recommendations made by the Ministerial Panel on Business Compliance Costs,
Commerce and Associate Revenue Minister Paul Swain said today.
“The tax simplification initiatives were designed to reduce the stress, uncertainty and risks for small businesses in
meeting their tax obligations," said Mr Swain. "Today, ten of those initiatives are in taxation bills before Parliament
and close to becoming law.”
Those initiatives include:
- making it easier for employers to employ staff;
- allowing businesses to pool their provisional tax payments with those of other businesses and thereby reduce the
amount of interest they pay to Inland Revenue;
- businesses not having to value small amounts of trading stock;
- raising the threshold under which a provisional taxpayer is not subject to the use-of-money interest rules;
- increasing the number of taxpayers who do not have to file tax returns;
- more flexibility for interest payers in the way they communicate resident withholding tax (RWT) information; and
- simplifying family assistance entitlements and improving the way family tax credits are paid.
“Work is also being done to match provisional tax payments with cashflow. That way businesses will pay tax when they
have money instead of in three large lumps that bear no relation to how they actually operate,” said Mr Swain.
"Another angle of the government's approach to tax simplification is to explore ways of using electronic technology to
simplify tax administration processes, and to broaden the range of electronic services that Inland Revenue provides,”
said Mr Swain. “The department is planning a number of new electronic services designed to make it easier for businesses
to pay their tax.
"Simplification is one of the focuses of the government's forthcoming review of fringe benefit tax, which will aim to
simplify and improve fringe benefit tax," said Mr Swain.
In other compliance cost reduction areas the government is making progress. “We’ve established a Business Compliance
Costs Unit within the Ministry of Economic Development,” said Mr Swain. “The Unit is dedicated to improving the standard
of policy making.” We have also moved forward on our response to the report of the Ministerial Panel on Business
Compliance Costs, established in 2001. Around 60% of the Panel’s recommendations have been implemented, or are about to
be implemented.
Initiatives that have been implemented include:
- $1 million for a number of projects to reduce the time and costs involved with consent processes under the Resource
Management Act.
- The appointment of additional judges and additional funding ($2.1m over the next 3 years) to improve administration
and reduce the backlog in the Environment Court.
- The development of a new case management regime that will allow for better prioritisation of cases and speed up the
appeals process in the Environment Court.
- $500,000 to enhance the BIZ service, and to progress a “one stop shop” for business. The additional funding will be
used to improve the BIZ website, develop new publications to assist business and provide additional training for BIZ
advisors.
- The formation of a test panel comprising both employee and business representatives, formed in October 2001, to advise
the government on operational issues arising from the implementation of the HSE Amendment Bill.
- ACC now being responsible for collecting both fully-funded and tail levies, resulting in significant compliance cost
reductions for employers and the self employed. Previously, IRD collected “tail’ (residual claims) levies.
We’ve also started the process of improving the quality of new regulation, said Mr Swain. “From April last year, all
policy proposals submitted to Cabinet, which have compliance cost implications for business must include a Business
Compliance Cost Statement. These complement the Regulatory Impact Statements, which sets out all the costs and benefits
of regulations.”
“This government is serious about reducing compliance costs for business”, said Mr Swain. “We will be building on the
successes of the previous two and a half years and incorporating initiatives to improve the regulatory environment for
business. In particular we want to ensure we remove unnecessary barriers to innovation, competition and business
performance.”
Ends