The Governor General yesterday signed orders in council making legislative changes in three areas:
FBT on low-interest loans. The fringe benefit tax prescribed rate of interest for low-interest, employment-related loans is to rise from 6.5% to 7.59% from the quarter beginning 1 April 2000. The increase is in line with market interest rates.
Income Tax (Fringe Benefit Tax, Interest on Loans) Amendment Regulations 2000
Electronic refunds of housekeeper, donation rebates. Inland Revenue will be required to direct credit tax refunds related to housekeeper and donation rebates into taxpayers' bank accounts from 1 April. As part of the move towards tax simplification, legislation enacted last year allowed for progressive implementation, by means of order in council, of compulsory direct crediting of tax refunds. Refunds for housekeeper and donation rebates are the first to be required to be made electronically.
Taxation (Direct Credit Refunds-Rebates) Regulations 2000
Student loan interest rate. As announced on 18 February, the student loan interest rate for the 2000-01 income year is to be frozen while the Government reviews the way the rate is set. The order in council gives effect to this announcement. The base interest rate has been set at 6.1% and the interest adjustment interest rate at 0.9%, which together equate to the current total rate of 7%.
Student Loan Scheme (Interest Rates) Regulations 2000