LEG-19-MIN-0180 – Minute: Income Tax (Fringe Benefit Tax, Interest on Loans) Amendment Regulations 2019

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Income Tax (Fringe Benefit Tax, Interest on Loans) Amendment Regulations 2019

Portfolio Revenue

On 19 November 2019, the Cabinet Legislation Committee:

1 noted that the Income Tax (Fringe Benefit Tax, Interest on Loans) Amendment Regulations 2019 set the prescribed rate of interest for calculating the taxable benefit of low-interest, employment-related loans;

2 noted that, consistent with the latest results of the Reserve Bank’s survey, the Fringe Benefit Tax (FBT) prescribed rate of interest should be lowered from 5.77 per cent to 5.26 per cent for the quarter which commenced on 1 October 2019;

3 noted that lowering the prescribed rate will have the following impact on Crown Revenue:

4 noted that the impact in paragraph 3 is a forecast change and does not have appropriation implications;

5 authorised the submission to the Executive Council of the Income Tax (Fringe Benefit Tax, Interest on Loans) Amendment Regulations 2019 [PCO 22508];

6 noted that a waiver of the 28-day rule is sought on the grounds that early commencement is necessary to enable the lower rate to apply from the start of the current quarter, and will only confer benefits on those affected;

7 declined a waiver of the 28-day rule;

8 noted that the Regulations will come into force 28 days after their notification in the Gazette;

9 noted that the Minister of Revenue will issue a press statement announcing the decrease once the Regulations are made.

Gerrard Carter
Committee Secretary

Present:
Hon Chris Hipkins (Chair)
Hon Andrew Little 
Hon David Parker
Hon Stuart Nash
Hon Iain Lees-Galloway
Hon Jenny Salesa
Hon Tracey Martin
Hon Eugenie Sage
Michael Wood MP (Senior Government Whip)

Officials present from:
Office of the Prime Minister
Officials Committee for LEG

Hard-copy distribution:
Minister of Revenue