New Zealand Government Keen To Ensure Banks Are Paying Enough Tax

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

29 March 2004

It emerged from media reports last week that New Zealand’s Inland Revenue Department has been discussing the subject of tax with the banking sector for the past year, as the government seeks to discover whether it is getting its fair share of revenues from the banks’ “exceptionally large profits.”

"There's reason to think that our laws could be improved a bit," Inland Revenue Policy Chief Robin Oliver commented in an interview with National Radio, continuing:

"We've basically looked at a few of their accounting numbers, looked at the tax payments, we've looked at our laws and we're not sure that we are getting a fair share of tax.”

However he added: "But there could be lots of reasons for that. We've been working that through with the banks, discussing what the laws are and what could give rise to differences between accounting profits and taxable income."

Whilst the tax laws for banks are the same as for multinational companies, Mr Oliver suggested that there might need to be some small adjustments to the laws to take into consideration the different nature of the banking business.

Mr Oliver revealed that the Inland Revenue was aiming to report back to Dr Cullen in the next few months, with the possibility that new proposals will be tabled towards the end of this year.

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