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New Zealand has introduced a new tax bill into Parliament to help modernize the administration of taxes.
The Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Bill contains proposals relating to collecting employment and investment income information.
The proposals will help Inland Revenue to ensure that people are on the right tax code and receiving any entitlements correctly. The Bill also contains proposals to modernize the taxation of employee share schemes.
Employee share schemes are arrangements where companies provide shares or share options to their employees as part of their remuneration.
Changes proposed in the Bill include new rules to ensure the tax treatment of employee share schemes is consistent with other forms of employment income. This includes providing a deduction for the employer for the cost of shares in line with other forms of remuneration.
"The employee share scheme measures proposed in the Bill are based on feedback from two rounds of public consultation in May and September 2016," said Revenue Minister Judith Collins. "The consultation process has been valuable in shaping the reforms contained in this Bill."
"For example, the original proposals raised the possibility of abolishing the tax regime for widely offered schemes, but in response to feedback the rules are being retained, but simplified and improved."
Collins said that the discussion process would continue, with the revenue currently developing a public consultation document that refines the start-up proposal that was contained in the 2016 issues paper.
Collins says a range of measures addressing taxpayers' concerns such as issues with demergers and decommissioning costs for petroleum miners are addressed by the Bill. There are also a number of Goods and Services Tax-related matters included.
She added that the Bill includes a proposal to add five new charities to the list of donee organizations eligible for tax benefits. These are Byond Disaster Relief New Zealand, Flying for Life Charitable Trust, Médecins Sans Frontières New Zealand Charitable Trust, Tony McClean Nepal Trust, and Zimbabwe Rural Schools Library Trust.
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