The proposals in Simplifying the Taxation of Small Business in New Zealand have drawn a mixed response from members.
Official feedback was being compiled as the Journal went to print, but the flavours of opinion can be discerned from the lively discussion underway in the “Members of the Institute of Chartered Accountants” group section of LinkedIn.
Comments under the topic “Simplifying the NZ tax system document number two – become informed it will effect your future” include:
“…the relationship between the CA and the small client is about more than just tax compliance, and this is not addressed in the proposal very well.”
“The proposals seem to me like more tinkering and modifying. I agree with the concept of simplifying but if the Institute really wants to do something about it then we should go back to the beginning and effectively rewrite the tax rules from scratch. Remove all loopholes and exemptions and have a balanced, trustworthy tax system.”
“I believe importing parallel tax systems for different taxpayers is complicating the tax system rather than simplifying it. Although it may provide plenty of tax planning opportunities (smiley face here).”
“But of course there are also a lot more questions: What becomes of the IR10 statistical return and? How will Look Through Companies be administered? When will be the implementation date for March balance dates?
"Just how much extra work is this going to create for bookkeepers, accountants every two months when it comes time to file the GST/income tax combo? Etc.”
“Another interesting impact this proposal will have is of course on how the modern accountancy practice servicing small-to-medium sized business clients will be made up from a human resource point of view. Once the proposal is in place, is it possible there is going to be substantial change in the wind for business advisory staff and the decisions of those recruiting them?”
“It is hard enough to get clients to maintain good records already, let alone introduce good governance practices, which is where, as an accountant you can add value. This document will only encourage an even more lackadaisical approach to business management at time when the government is trying to improve governance standards.”
“To have a tax, or other regimes in place, a key element of which is to protect the income of any sector of the economy, including Chartered Accountants, to me seems unprofessional and perhaps, or probably, unethical.”
Simplifying the Taxation of Small Business in New Zealand attracted wide interest across all media.
NZICA Chief Executive Terry McLaughlin FCA went live on Breakfast television, radio and daily newspapers reported the launch, as did news and business websites.
The media have by and large responded positively, and correctly treated the proposals as thought leadership rather than policy prescriptions.
The government is focussed on supporting business to grow and will continue to look for opportunities to reduce compliance costs. – Revenue Minister Peter Dunne, “Govt to consider simpler tax rules”, NZ Herald, 17 May
The goal is to strip out the complexity from the tax rules and free small business to be more productive. – “Tax plan aimed at black-market cash”, Manawatu Standard, 17 May
There are always solutions; it just depends on the government’s commitment to simplify life for small business. – “Government pays lip service to tax plan”, stuff.co.nz, 22 May
Revenue Minister Peter Dunne today thanked the New Zealand Institute of Chartered Accountants (NZICA) for its contribution to the wider discussion on simplifying tax for small and medium sized businesses in New Zealand. – “Dunne: chartered accountants’ contribution welcomed”, Scoop, 16 May
The burden of tax returns is a regular complaint from small business owners and the NZ Institute of Chartered Accountants has some ideas for how to change that. – “Tax for small business”, TVNZ Breakfast, 16 May
The Institute of Chartered Accountants says it shouldn’t take a small firm any more than one hour to do its return and pay all its tax every month” – “Call to simplify tax system for smaller businesses”, Radio NZ morning news, 17 May
Not only does the present system deter people from starting their own business, it is also likely that complexity discourages compliance. The NZ Institute of Chartered Accountants (NZICA) is proposing some radical solutions aimed at separating out this group for a very simplified approach, significantly different to what is required for larger businesses. – “Accounting body working to radically simplify tax returns for small businesses; aiming for tax returns that take one hour per month”, Interest.co.nz, 16 May
The proposal has been controversial with some members – as it would eliminate the basic accountancy needs of businesses. But the industry needs to keep up with the times as accounting processes become more computerized and automated generally.” – “Proposed tax changes could put accountants out of basic business”, NBR, 18 May