Get ready for the biggest tax changes in a generation
The biggest tax changes in a generation are coming, and they will affect almost every business household and business across the country.
Inland Revenue is about to ramp up a major public information and awareness and campaign to explain the changes, ahead of the April 2019 tax year.
“For the first time, automated tax assessments will see around 1.67 million New Zealanders get a tax refund paid straight into their bank account,” says Inland Revenue Commissioner Naomi Ferguson.
“About 720,000 of those people will not have had any recent contact with IR, some not for 20-years or more, so it may come as a surprise. That’s why we’re running this campaign – to make sure as many people as possible understand what’s happening.”
She says that of those 720,000 people, about 530,000 will be people who earn less than the minimum wage or beneficiaries, which means they’ve never applied for a tax refund before.
The changes come hand-in-hand with the new payday filing process.
More than 330,000 Working for Families customers will also benefit from the new process with IR getting their wage and salary information immediately, allowing IR to adjust payments so customers are always getting the right amount.
“IR will get your payroll information on your paydays instead of employers having to do a separate report to us once a month. Payday filing is mandatory from 1 April and many have started already, says Ferguson.
“And for investments, the new system will see dividend and interest payments reported to IR more frequently by the banks and others who make the payments, so that taxpayers receiving them don’t have to.”
Inland Revenue customer segment lead Richard Owen adds that payday filing will make things easier for employers to submit pay information.
“Businesses will be able to integrate their tax obligations into their regular payroll cycles, while the more timely information will allow Inland Revenue to provide certainty around an employee’s social entitlements such as Working for Families Tax Credits,” he explains.
Ferguson adds that despite the changes, most people will be able to pay and receive the right amounts across the course of the year without having to do anything.
“That’s the point of all these changes - to make tax easier and more accurate for New Zealanders.”
“Come the April 2019 tax year our transformation process will see the ‘big ticket’ items - GST, provisional tax, income tax, Working for Families and investment, all on the new system.
“The next steps, in the coming two to three, years will see child support, student loans and KiwiSaver bought in as well. We’ve made a lot of progress and will continue to do so.”
Inland Revenue will support its education campaign with print, radio and online advertising, a website, and direct communications to wage and salary earners.