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New Zealand Aims To Simplify Tax Compliance

by Mary Swire,, Hong Kong

17 June 2014

During a recent conference on tax administration, New Zealand's Minister for Revenue, Todd McClay, discussed the work being undertaken by the Inland Revenue Department (IRD) to improve taxpayer engagement.

In his opening remarks, he said the nation's broad-based, low-rate (BBLR) regime has been fundamental to its economic recovery following the global financial crisis. "BBLR means tax administration benefits from a regime based on voluntary compliance," he said. "It's an efficient way to run a tax system as long as compliance remains high. This works well for us in New Zealand."

A key priority for the IRD has been to simplify and modernize the administration of taxes to make it easier for New Zealanders to meet their tax obligations. McClay recalled a number of initiatives undertaken by the IRD to make compliance easier, including:

  • Voice ID, which is now being used by one million taxpayers – a secure digital identification service that allows customers to verify their identity and access automated tax self-assessment services, saving 8,500 hours of telephone time each year.
  • myIR, a secure online service, which allows people to check their tax details, child support, Working for Families, and KiwiSaver accounts, and submit goods and services tax (GST) returns online. This platform has signed up 1.7 million taxpayers; and
  • Simplification of the process for parents to obtain an IRD number for new born children. Parents are no longer required to obtain a number in person, and instead can apply for an IRD number when they register the birth with the Department of Internal Affairs.

Discussing future initiatives, he said the IRD is seeking to improve the accuracy of refunds and assessments; to reduce the time that compliance takes, and cut costs for taxpayers; and improve the agency's efficiency.

"Taxpayers can expect a focus on making the system easier for them, to provide greater certainty in their dealings with the tax department," McClay said. "In expecting taxpayers to comply with tax rules, where possible we will work to make these rules simpler, and in so doing reduce administrative and compliance costs to help them meet their obligations more easily."

He also pointed out that the Taxpayer's Simplification Panel has been set up "to listen to the public's opinions on Inland Revenue's processes, to tell us about the things that frustrate people, and submit ideas about what can be done to make paying tax easier."

TAGS: individuals | compliance | tax | business | tax compliance | goods and services tax (GST) | New Zealand | tax reform | services | Work | Tax

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