On 27 February 2018, the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Bill had its second reading.
The Bill initially proposed repealing the current payroll subsidy received by some from 1 April 2018. Inland Revenue currently offers a payroll subsidy of up to $10 per pay-run to listed PAYE intermediaries who manage the income tax obligations of eligible employers. However, feedback during the Select Committee stage and the Committee’s recommendations have been taken into account and Government has decided to renew the subsidy for another two years, until 1 April 2020. The eligibility threshold for accessing the subsidy will also be lowered from 1 April 2019, to businesses with less than $50,000 of income tax and superannuation obligations (PAYE and ESCT). It’s estimated around 24,000 employers who use a payroll intermediary fall into this category.
The Bill also contains proposals aimed at improving the current tax settings with the tax treatment of alternative forms of income and expenses proposed to be as even as possible.
The Bill also sets the annual rates of income tax for the 2017/18 tax year.