NZ's Revenue Minister Critical Of Kiwisaver Tax Credit

by Mary Swire, Tax-News.com, Hong Kong

06 March 2009

New Zealand's Revenue Minister Peter Dunne has recommended that the proposed introduction of an annual square-up process for calculating the KiwiSaver employer tax credit does not proceed, to save employers facing unnecessary compliance costs.

The proposed change is part of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Bill, introduced in July 2008, and which is still before Parliament.

The amendment was intended to apply from 1 April this year for employer contributions made from April 1 last year.

"The employer tax credit was repealed in December last year, with effect from April 1, 2009, so I don't think it is reasonable to expect employers to incur the costs of developing systems to apply the square-up for one year only", Mr Dunne explained, adding:

"Inland Revenue has consulted with a number of employers on the matter and has reported that most think that, on compliance cost grounds, it wouldn't be worth claiming the square-up."

"The government also believes that the amendment shouldn't proceed. I have therefore written a letter to Craig Foss, the chairman of the Finance and Expenditure Committee, recommending that the proposed square-up process be removed from the Bill", he finished.

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