May 2019

In April, the IMF predicted that New Zealand’s economy will perform well when compared to other OECD members, despite the likelihood of a global slowdown. Analysts remain concerned about a lingering fallout from the trade war between the United States and China, which has been going on for some time and has sent ripples through nearly every major part of the world economy.

April 2019

New Zealand’s economy has plenty going for it, but ripples from the global business slowdown could end up hurting the country’s private sector.

First, the good news. New Zealand’s unemployment rate is at its lowest in the past 10 years, letting the bulk of the country share in these prosperous times. However, some companies may face difficulties in the future, due to this same trend. The shortage of unemployed workers makes it harder for businesses to find new and qualified employees for their vacant positions, which in turn gives those skilled workers more power in terms of bargaining for their desired positions. In these times of rapid technological advancement in business, a failure to find qualified hires may mean a failure to keep up with the changing market.

March 2019

Revenue Minister Stuart Nash recently announced that New Zealand will add 30 territories to its existing list of 60 countries which have mutually agreed to share tax information in a bid to combat tax evasion, according to New Zealand’s Inland Revenue Department.

The move came as part of a global effort to curb tax avoidance under the programme called the Automatic Exchange of Information (AEOI), which is supervised by the Organisation for Economic Cooperation and Development (OECD).

February 2019

In his state of the nation speech delivered at the end of January, National Party leader Simon Bridges explained that his party will offer ‘rolling tax relief’ to help with increased expenses.

“New Zealanders’ incomes are struggling to keep up with the rising cost of living because this Government is imposing more red tape and taxes,” Bridges said.

The plan for tax relief comes as the National Party aims to put pressure on the current government’s tax plans, its decision on whether or not to proceed with introducing a ‘controversial’ capital gains tax.

January 2019

The new taxation bill (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matter) proposes several changes to be made to KiwiSaver. The bill is currently awaiting a select committee report, before it will be read again in parliament later this month.

Changes include adding new contribution rates of 6% and 10% to be added to the existing 3, 4, and 8 percent rates.

The proposed taxation bill will also allow a new demographic of New Zealanders over 65 to join the scheme for the first time. Employees will not be compelled to contribute for this age group, but can do so voluntary.

December 2018

Growing tourism numbers, the various business benefits of the Trans-Pacific Partnership (TPP), and an increased investment in environmental protection are already beginning to shape New Zealand’s economic trends for the coming year. How these trends will be managed, and in particular how the government will navigate the intersection between economic growth and environmental protection, remain to be seen.

The arrival of the TPP will bring widespread tariff cuts between participating nations, creating advantageous export conditions for NZ farmers. For example, TPP terms will help squash growers recover more than NZ $1.5 million a year from the tariff – the equivalent of $50,000 per farmer. Cherries, wine and beef are among the other exports in the food and beverage sector that are expected to see significant growth due to the tariff cuts.

November 2018

 

Recent efforts to refine and balance New Zealand’s economic system have already shown impressive results, with the country outcompeting most others on the world stage in several areas. The World Bank’s Doing Business 2019 report recently ranked NZ first worldwide on its ‘ease of doing business’ scale, which singles out countries with “well-designed business regulation or whose regulatory environments have thrived thanks to comprehensive reform over the years.”

In New Zealand, 22 of the top 30 CA ANZ accounting firms are offering Audit Shield to their clients. We love contributing to their success! 

Click here to view the article.

 

“In this world nothing can be said to be certain, except death and taxes,” unless, Mr Benjamin Franklin, we’re talking about the proposal of a capital gains tax (CGT) in New Zealand. Here, the forecast looks decidedly unclear.

The Tax Working Group (TWG) presented its interim report last month on its recommendations for the introduction of a CGT – among others – and the debate has divided into two fiercely opposed camps. 

Chair of the TWG, Sir Michael Cullen, had this to say about a comprehensive CGT: “Every developed country except New Zealand has a reasonably broadly based form of capital taxation. So, the question is, are we so bright that we are the only people who aren’t doing it, or are we so dumb that we are the only people who can’t manage to do it?”

October 2018

Government data matching across New Zealand has become very sophisticated. The amount of data readily accessible to the government is not only more than ever before, it is also more current and updated.

A wider outlook reveals that governments around the world are looking to transfer pricing or intercompany transactions with a push for taxpayers to ‘pay their dues’ in countries where they earn income. This doesn’t only affect larger companies like Google or Apple, but will have implications for multinational SMEs in New Zealand too.


September 2018

From April 2019 onwards, all New Zealand businesses will be required to file their PAYE returns every payday, as opposed to once a month.

Some 400 employers are already using payday filing. However, there are many thousands more who need to make the switch. With less than seven months to go, time is running out and the Inland Revenue has advised businesses to begin the transition now.

The payroll software provider FlexiTime assisted Inland Revenue with trialling payday filing. Its chief marketing officer, Jake Harvey, said: “We’re excited to already be up and running with our zero-touch, fully-automated payday filing solution that eliminates what was previously a manual monthly task for businesses.”

August 2018

Statistics New Zealand (StatsNZ) have revealed that consumer price inflation (CPI) increased by 0.4% in the second quarter, which is lower than the 0.5% increase previously forecasted by economists. Banks and authorities are prepared to take actions to boost the inflation rate if necessary, to keep the economy within healthy parameters for investment.

Petrol prices, a key variable in determining inflation the rate, rose by 3.2% over the previous quarter according to StatsNZ. In May, petrol reached a peak of $2.299 per litre across most of the country due to rising global oil prices as well as local currency depreciation, contributing to New Zealand’s modest inflation rate – but it may not be enough. "Maintaining inflation around 2 per cent next year would require a further surge in world oil prices and/or a continued slide in the exchange rate," said Dominick Stephens, a Westpac chief economist.

July 2018 

Although no official date has been announced yet, it is expected that from between mid-late 2019 onwards, New Zealand will begin charging international visitors between NZ $25 - NZ $35 to enter the country. It is expected that the tax would be applicable to most travellers staying for 12 months of less. The tax would be used to fund tourism, infrastructure, and conservation efforts, reflecting the debate surrounding the increasing environmental and infrastructure pressures resulting from the growth in tourism.

June 2018

A proposed tax planned to come into effect October 2019, known colloquially as the ‘Amazon Tax’, could add taxes to books and other small goods under $400 bought online.  The tax would be beneficial to independent booksellers who have long struggled to compete with Amazon.

According to Revenue minister Stuart Nash, this plan will close the tax loophole, which allows people to buy small items online and bypass the 15% tax imposed on goods sold in New Zealand Stores. Nash says, “Small businesses such as bookshops have convincingly argued they are penalized by a system which is badly out of date.”

10th May 2018

New Zealand’s proposed so-called ‘Amazon Tax’ falls squarely in line with the enactment in 2016 of its ‘Netflix Tax’, as part of a modernisation effort to help adapt the country’s tax system to the realities of present-day commerce. The Amazon Tax would apply to importation of low-value goods from abroad which have previously gone untaxed.

Current estimates put the value of such untaxed imports at $533 million per year as of 2016, with an increase to $850 million likely by 2021 as the e-commerce industry continues to grow. The new law is not yet set in stone, but it is aiming for a 1st October 2019 start date. If left unchanged, non-resident suppliers that deliver more than $60,000 per year in goods to New Zealand consumers will be required to register for, and pay, GST on all low-value (<NZ$400) items shipped. Items valued at over NZ$400 will be taxed by customs, but will not be affected by the newly proposed law.

10th April 2018

The New Zealand Treasury has begun preparing a non-financially-focused ‘Wellbeing Budget’ for the country, according to a news release that has had some readers double-checking to make sure the information wasn’t released on April Fool’s Day, and that the primary source wasn’t The Onion or a similar satirical site. The news is indeed real, however – and moreover, it may be a welcome development for the country, depending on the implementation.

“Life is about more than money,” wrote the New Zealand Treasury in its recent annual Investment Statement. In fact, as far back as 2011, Treasury drafted an economic policy paper that blended the natural world, human living quality and the health of the society as a whole into a more holistic document. The framework has been developed further in recent years, with financial matters still being included in relation to these other variables.

27th March 2018

New Zealand’s Inland Revenue (IR) will implement a newly introduced provisional tax option for the country’s small businesses. Starting this April, many small businesses with less than $5 million turnover a year will have the new tax payment option that enables them to use a new method to pay provisional tax only when they are earning profits.

16th February 2018

The treasury has recently released a statement announcing that the second half of 2017 has seen New Zealand’s government gain $600 million more tax dollars than expected. Core Crown tax revenue was $597 million ahead of expectations and amounted to $37.2 billion during this six month period.

"At this point in the year these results indicate the economy is tracking well. The Government is committed to seeing this continue and ensuring that we have sustainable growth and a fair share in prosperity for all New Zealanders," said Finance Minister Grant Robertson.

31st January 2018

Sugar leads to obesity. This fact and a new study by the University of Waikato's School of Food and Nutrition are driving a renewed interest in a New Zealand sugar tax. The study has sparked a debate and has made headlines across Asia Pacific.

19th December 2017

Tax cuts proposed by the National party are now being scrapped. In their place, the Labour party will roll out their Families package legislation, which will cost an estimated $5.3 billion over four years.

CONNECT WITH ACCOUNTANCY INSURANCE

CLIENT SUPPORT

AUDIT SHIELD LOGIN