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Inland Revenue

Tax Policy

PUBLISHED 29 September 2004

Tax compliance costs to be surveyed

A comprehensive tax compliance cost survey of small and medium-sized businesses will begin in October, the government announced today. The purpose of the IRD-commissioned survey, which will cover income tax, GST, PAYE and FBT, is to provide quantitative data for developing and evaluating government proposals for tax simplification measures. For more information see the government's media statement.

Hon David Cunliffe
Associate Minister of Finance, Revenue, Communications and Information Technology
Member of Parliament for New Lynn


Tax survey to give hard data on costs

Over five and a half thousand letters have been sent out to small and medium-sized businesses (SMEs) this week to gauge the cost of complying with tax obligations.

"Making life easier for SMEs is the reason we are doing one of New Zealand's most comprehensive tax surveys," Associate Revenue Minister David Cunliffe announced today.

"As part of the government's tax simplification programme, 5600 small and medium-sized businesses (SMEs) will be invited to take part in a major survey commissioned by Inland Revenue to find out how much effort they put into filing tax returns," Mr Cunliffe said.

The research will provide hard data for developing and evaluating government proposals for tax simplification for SMEs, which will allow for better policy-making. The survey will cover income tax, GST, PAYE and FBT, and a full range of SMEs. Inland Revenue has consulted with the Institute of Chartered Accountants and Business NZ to make sure the approach is right.

"The survey will allow the government to set a base for improving the system and evaluate the benefits of changes already under way," said David Cunliffe.

An example of a such a change is the idea, put forward last year in a discussion document on ways to make tax easier for small businesses - offering a 6.7% discount for self-employed people who make voluntary payments of income tax in their first year of business, to reduce the strain of paying two years' tax in their second year of business. That change is now before Parliament and is likely to be enacted by the end of the year.

Other ideas set out in the discussion document, such as aligning provisional tax and GST payments and allowing businesses to base provisional tax payments on GST turnover, are undergoing further consultation and will benefit from the information that emerges from the survey.

"The survey is part of the government's continuing commitment to making it easier for smaller businesses to cope with the tax side of business." said Mr Cunliffe.

Contact: Julian Kersey, Office of Hon David Cunliffe, 04 471 9116, 021 811 999 or [email protected]