Baldock: IRD claiming GST from thin air

United Future local government spokesman Larry Baldock today highlighted a growing concern among local councils when he asked for clarification of the IRD's expectation that councils pay GST even on rates that have been remitted.

"In other words, when a council remits the rates on multiple-owned, unused Maori land as it is required to do under Schedule 11 of the Local Government Act, the IRD is considering still requiring that council to pay an equivalent amount to the GST on the rates it did not collect.

"I'm on the record as saying that the Government shouldn't be creaming GST off rates - a tax on a tax - but to claim it on rates that are not even collected is simply ridiculous and grossly unfair," Mr Baldock, who today raised the matter in Parliament, said.

He said the move simply added to the burden created by a decade of devolution of responsibilities to local government without a commensurate ability for councils to source income by any means other than increasing rates.

"Every year, councils find themselves between a rock and a hard place when they face angry ratepayers objecting to additional costs for services that councils have been obliged by central government to provide.

"It is time the central government / local government partnership got down to the nitty gritty of who is paying the bills and how," he said. Ends.

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