Monthly Archives April 2009

KPMG Claims IRD Behavior Damaging

April 23, 2009 New Zealand FinanceNew Zealand Taxation  No comments

Accountancy firm KPMG are laying claim that the IRD’s behavior in tax disputes is doing more damage than it is good.

According to KPMG the Inland Revenue Department (IRD) is taking an increasingly “tortuous” route in tax dispute cases, leading both individual clientele and large businesses to take a more upstanding or adversarial approach to the IRD than normally.

KPMG is claiming that the IRD’s adjunction (or evidence review) process is so not fit for the purposes that it was intended for that the IRD is self-justifying ignoring the adjunction process all together and bypassing it. Further it claims that the IRD has sought on occasion to attain the confidential advice given by accountants to their clients...

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Diesel Tax to be Scrapped

April 22, 2009 New Zealand FinanceNew Zealand Taxation  No comments

Indications have it that the road user charges which act as a tax on diesel fuel could soon be scrapped.

Transport Minister Steven Joyce is expected to release a review over the next few weeks, in May, assessing the viability of replacing Road User Charges (RUC) currently levied on diesel users, with a system more akin to the current tax per liter of petrol.

The report on which Steven Joyce is commenting was submitted to him earlier, which was initially started by request of the previous government’s Transport Minister, Annette King.

From initial statements by the government, there are already indicators that this decision will go ahead. It is claimed that from the $900 million generated by the RUCs, $120 million is spent on administration and follow up...

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NZ to See Frugal 2009 Budget

April 20, 2009 New Zealand Finance  No comments

New Zealand Prime Minister John Key has said that the upcoming budget will be more frugal in comparison to previous governments.

In an interview with the Financial Times (FT) John Key said that fears of a credit rating downgrade by rating agency Standard & Poor’s from New Zealand’s current AA+, is what is apparently keeping the upcoming New Zealand budget at a constrained level.

As such, there is a need to cut governmental spending and by necessity includes any further financial stimulus for New Zealand. These comments are partnered with an OECD report which states that New Zealand is likely to remain in a recessionary state throughout 2009 and possibly recover “hesitantly” in 2010.

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PDP Taxation to be Clarified

April 17, 2009 New Zealand FinanceNew Zealand Taxation  No comments

The Government has released statements saying that they are seeking to clarify matters around taxation of certain profit distribution plans.

According to a media release made by Finance Minister Bill English and Revenue Minister Peter Dunne, the Government is concerned about the taxation consistency found between standard dividend reinvestment plans and bonus issues of shares distributed under profit distribution plans (PDPs).

Regular dividend reinvestment allows receivers to choose between receiving cash dividends or shares. Both options are subjected to the imputation and taxation system. Under certain PDP setups dividends come in the form of share issues, which are immediately sold for cash back to the company...

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