Fresh from the large cash injection of Budget 2016, the IRD transformation programme is moving forward, with the Tax Transformation Bill passing its third reading (31 May).
This bill is really just the initial ‘tidy up’ bill, getting things in place for the first phase of the transformation changes. The bill includes some simplification measures in regards to employee share schemes, in which the administrative process around paying tax was inefficient, and required employees to file a tax return to declare income. The changes now allow the employer to withhold tax as part of their PAYE.
The bill also simplifies some other administrative processes for taxpayers including:
- Allowing IRD to transfer a KiwiSaver member’s details to relevant fund providers when the member changes schemes,
- Allowing documents, such as tax returns, to be files with an electronic signature rather than in writing;
- Increasing the threshold for automatic refunds for PTS filers.
The theme of this initial transformation bill is easing IRD’s communications; however we are awaiting the next steps of the modernisation of the tax administration system.