- Large amounts of legislation before parliament creating uncertainty for business in 2019
- Property and capital gains taxes continue to capture Members’ interest
- Changes coming in 2019
2018, where we ended up
Welcome to 2019, I hope that the festive season was a happy and safe one.
Shortly before the holidays I had the opportunity to provide a three-hour update to our members based in London. Members were particularly interested in hearing about doing business in New Zealand, property related matters and the current economic climate considering the changes on the horizon stemming from the Tax Working Group report.
While we closed off 2018 with an increase in business confidence, it was a bumpy year with confidence rising and falling several times. Strike actions in a range of industries and Government sectors, compliance and reporting requirements for SMEs, and skill shortages in the workforce all played a part.
The Government was busy meeting their 100 day promises and as a result, 2018 saw a lot of changes for businesses and taxpayers, including; regional fuel levies introduced, revoking oil and gas permits, changes to labour rules and a review of the holidays act, a focus on wage parity, and over 100 committees and working groups under way.
Legislation driving uncertainty
The large amount of legislation before parliament created uncertainty for business and this continues into 2019, with 48 Government Bills open at the time of writing. While consultation on the GST Offshore Supplier Registration Bill closes in February, the Research and Development Tax Credits Bill is due to be heard before the Finance and Expenditure Committee shortly and the Modernising Tax Administration Bill should be enacted in March. All of this before considering the Tax Working Group recommendations which are expected in February, with consultation on discussion documents from mid-year onwards.
Our members overseas were interested in property in NZ, some wanting to return home (or to avoid Brexit!) and some with investments. A lot of attention was given to the revised 5 year bright-line test which came into effect last year, Airbnb's being treated as businesses and incurring significantly higher councils rates and insurance, consultation on ring fencing of rental losses, and of course the possible recommendations to extend taxation on income from capital as part of the TWG.
2018 was, to sum up: busy. Looking into 2019, we're not going to get much of a break from policy review and reform. We're starting the year off with a bang with appearances before the Finance and Expenditure Committee on the R&D Tax Credit Bill and consultation on the current GST Offshore Supplier Registration Bill. By mid-year the migration of income tax to Inland Revenue's START system will be underway and presents both a challenge and an opportunity for the tax system and many taxpayers will get their first 'hands on' interaction with the system following automation changes introduced last year. The Tax Working Group will continue to be a focal point of the tax world throughout the year. From my recent trip to the GAA Tax Directors meeting, it is clear that tax reform and digital services taxation is a key topic internationally and we may see the digital and sharing economy undergoing a compliance catch up.
To help our members keep on top of all these changes, our Tax News NZ newsletter is kicking off in February, you can subscribe by visiting your member communications preferences here. In addition, our team will be visiting over 20 areas around the Country in April and May as part of our annual Tax Roadshow. Wishing you all a happy (and busy) 2019!