Simplifying Tax For Small Businesses

The tax landscape for small businesses in New Zealand has become increasingly convoluted and whilst it is Inland Revenue’s intention to maintain fairness and ease of operation, the system of how to calculate tax, what tax to pay and when to pay it, tax collection,and time and cost involved, it is clear the system is in fact not straight forward or practical.

To address these issues, New Zealand Institute of Chartered Accountants (NZICA) and Tax Management New Zealand (Tax Management NZ) are currently collaborating to identify ways to improve the tax compliance process between the Inland Revenue and small businesses so that both parties benefit on a number of levels throughout the tax process.

Your Say Matters

This report is the first draft for options to improve taxation for small businesses in New Zealand.
In order to present the Government with a comprehensive paper, we firstly need to hear from you.

We specifically encourage policy makers, lobby groups, business owners and accountants to provide feedback on this draft report. Once we have obtained your collective feedback, a more comprehensive report will be compiled and put forward to policy makers.

We seek recommendations from the following:

  • Policy Makers: Inland Revenue, Ministers of Finance, Revenue and Small Business, Tax Compliance, Tax Review Committee, Treasurer, Minister of Economic Development
  • Policy Groups: Business NZ, NZ Business Roundtable, EPMU, Chambers of Commerce, EMA, FANZ, CTU
  • Business owners: specifically micro and small business owners
  • Include Minister of small business
  • Accountants

How To Have Your Say

The report can either be read in its entirety or can be read in separate sections. At the conclusion of separate sections, a feedback facility is provided. We strongly encourage you to participate and take the opportunity to lend your voice to making New Zealand a better country in which to conduct micro and small business.

View the report

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Quote from Finance Minister Bill English [19 October 2009]

“I’m pleased to see the New Zealand Institute of Chartered Accountants and Tax Management New Zealand proactively looking at how the tax system for small businesses could be simplified to reduce compliance costs.
They have set out two proposals:
One is for micro businesses earning under $60,000 a year and not registered for GST to pay a final tax of 15 per cent based on turnover.
The other proposal is for businesses with annual turnover of less than $1.2million to have their income tax calculated on a cash basis, based on their GST return.

I understand that a final report will be submitted to the Government next year for our consideration, after consultation with the SME sector. I believe these proposals have merit and they will not be dismissed out of hand. Tax policy officials will engage with the Institute on them.”

TMNZ Tax