John Cuthbertson, CA ANZ NZ Tax Leader, and Scott Mason, Chair of the Tax Advisory Group, recently met with Stuart Smith, the newly appointed Chair of the Finance and Expenditure Committee (FEC) in Wellington.

CA ANZ took this opportunity to highlight our public interest advocacy, the comprehensive nature and balance of our tax submissions to the FEC, and our broad perspectives on tax policy and administration. We also sought input from the FEC Chair as to how it may better enhance the utility of its submissions to assist the FEC members.

Not wishing to miss an opportunity, our representatives also sought an extended speaking slot for oral submissions before the FEC in proportion to the depth and utility of written submissions we make. This request was declined, to be consistent with all submitters.

Despite significant variations in submissions, all group submitters receive a uniform 10 minutes to present orally to the FEC. This timeframe is not enough to address the key points of all items included in a substantive submission, often to the detriment of the legislation being advanced. For example, CA ANZ’s oral submission on the Multinational Tax Bill was by necessity limited solely to discussion on the appropriateness of the proposed 39% tax rate for trustees.

The meeting also touched on the importance of draft legislation coming to the FEC in a well-prepared form, developed through good consultation, and free from known errors and deficiencies. Put simply, submissions made to the FEC on draft legislation should have all the heavy lifting done and have no policy surprises. CA ANZ stressed that without proper process, the onus and risk fall on both the FEC and Minister of Revenue, sponsoring the legislation. It’s important to avoid cases like the aftermath of the proposed change in GST treatment on superannuation funds management fees, which resulted in the withdrawal of an entire tax bill within 24 hours of its introduction.

Smith was given an overview of the Multinational Tax Bill including a recap of CA ANZ’s main submission points and the likely key issues such as the trustee rate increase, the automatic adoption of OECD rules without sufficient upfront parliamentary oversight, and acknowledgement that the intended removal of commercial building depreciation would not be well received.

With a thorough understanding of our written submission, the Chair showed particular interest in the proposed two-tier trustee tax rate solution.