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Inland Revenue

Tax Policy

PUBLISHED 26 May 2016

Budget 2016

Tax-related Budget initiatives announced today by the Government focus on the transformation of tax administration. This includes proposals aimed at simplifying processes for business tax (launched in April) and new funding allocated to Inland Revenue for implementing the transformation of tax administration. For more information see the Budget 2016 announcements.

Budget 2016 tax announcements

The Government made two tax-related Budget announcements focused on the transformation of tax administration.

On 13 April, Prime Minister John Key launched a set of proposals aimed at simplifying tax processes for businesses. For more information see:

Also announced was $857 million allocated to Inland Revenue for implementing the transformation of tax administration. For more information see the Minister of Revenue’s media statement.

Full coverage of all Budget 2016 announcements can be found at

Hon Michael Woodhouse
Minister of Revenue

26 May 2016

Media statement

$857m to deliver a modern tax system

Budget 2016 invests $503 million of new operating funding over the next four years and $354 million of new capital funding for Inland Revenue’s new tax administration system, Revenue Minister Michael Woodhouse says.

“It is important that our tax system keeps pace with changes in New Zealanders’ expectations and changing business models,” Mr Woodhouse says.

“This investment will provide a modern, simplified tax administration system that meets New Zealanders’ needs, reduces compliance costs for businesses, and helps people get their obligations and entitlements right first time.

“The tax system transformation will be designed around New Zealanders and their businesses, giving people greater ability to manage their tax affairs online.

“Businesses will find that meeting tax obligations will become part of their normal processes, rather than a separate activity. This will allow small businesses in particular more time to devote to their business rather than taxes.

“These benefits will be delivered by increased use of digital technology, through the development of Inland Revenue’s new IT system.

“Inland Revenue’s current system is 25 years old. We need to invest in a new tax system that can keep up with the changing demands of New Zealand’s modern economy.

“These measures will deliver a modern tax system that will contribute to a healthy, growing economy, maintain a robust tax base, and distribute entitlements.”

The programme is expected to generate $284 million of savings for Inland Revenue and $280 million in additional tax revenue from greater compliance. These savings will be used to provide further funding for the programme, on top of the $857 million provided in Budget 2016.

This funding is in addition to the $187 million SME-friendly tax package announced in April.