25th October 2017

New Zealand’s tax system is changing. The wheels of the Inland Revenue’s business transformation programme are already in motion. With its implementation, not only will citizens be able to pay their taxes in an easier, faster and simpler fashion, but they will also gain more confidence that they’ll receive the deductions and entitlements they deserve. As the tax system is updated for the modern era, citizens will primarily interact with Inland Revenue via digital devices.

When can New Zealanders expect to see changes? The tax system overhaul has already begun. The transformation will take place in four stages, with stage one having gone live earlier this year in February 2017.

Stage one of the transformation introduced new GST online services this past February. New organisations and migrants are now able to register for a new IR number online and Inland Revenue can now recognise New Zealand Business numbers when they are contacted by citizens. These updates will make it easer for citizens to deal with Inland Revenue and also manage their taxes.

The next three of the four stages will be rolled out in the coming years, with all steps building on the last and bringing new streamlined processes into play. The changes will be gradual. And over time as new policies and improvements are introduced, the tax system will become simpler and easier for citizens to interact with. The overall goal will be to prevent tax problems and inaccuracies before they ever start. As Inland Revenue implements new technologies and refines their processes, they will get a clearer picture of individual tax situations, which will make it easier for them to help taxpayers.

With stage 2 currently underway, this step in Inland Revenue’s business transformation programme will focus on streamlining personal and business income taxes. AIM (Accounting Income Method), which will be introduced in April of 2018, will provide small businesses a fourth option to pay their provisional tax. Once fully implemented, AIM will help reduce compliance costs, provide more certainty about provisional tax, and offer a 'pay as you go' system that can be integrated into a business’s accounting software. All these changes will help businesses simplify the management of their taxes on an every day basis and save them a large amount of time.

As each new stage is rolled out, Inland Revenue is continually monitoring the process to ensure the system meets the needs of businesses, individuals, tax professionals, and all citizens. To ensure all New Zealanders can make the most of the new improvements, all people affected by the changes will be notified by Inland Revenue.

If you are a business owner or a person responsible for planning future strategies for your organisation, it is recommended to carefully review the government’s proposals for the tax system overhaul. These can be found at the website Making Tax Simpler.