New Zealand's SMEs Hit Hardest By Compliance Costs

by Mary Swire, for LawAndTax-News.com, Hong Kong

31 August 2004

According to the 2004 Business New Zealand-KPMG Compliance Cost Survey published on Friday, the costs associated with compliance with employment, tax, and health and safety legislation are weighing more heavily on the country's small businesses than on any other sector.

Despite a reduction in average compliance costs from $52,274 in 2003 to $43,876 this year, nearly all of the firms polled felt that their compliance burden was either the same or larger than last year.

The survey also revealed that compliance costs per employee were much higher for businesses with five or fewer staff, at $2,750, than for firms with more than 100 staff, at $500 per worker.

Respondents reportedly voted the country's business tax regime in greatest need of change, followed by employment-related legislation.

Speaking to The Dominion Post on Friday, chief executive of Business New Zealand, Simon Carlaw suggested that the government should put in place a "credible and transparent" regulatory impact statement detailing the compliance costs attached to legislation.

He also recommended an overhaul of New Zealand's tax laws, in particular those pertaining to fringe benefit tax and depreciation.

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