We have some bad news. You will have to pay tax for this current year. Of course this is also good news if you happen to like things like schools, or hospitals. But you might think that’s just a silver lining.
Anyway, the reason you have to pay tax is the passing this week of the snappily named Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill.
It had to be passed by the end of March to affirm the income tax rates for the tax year about to end. You might think it’s rather late in the tax year to do that, but apparently that’s normal.
Stuart Nash, Minister of Revenue Photo: VNP / Phil Smith
This happens at all because, despite the Government being ‘in charge’; for anything significant they want to achieve they have to get it approved by Parliament. In this case: can we please collect some tax?
That tax bill actually had more to it than just the rates. The Minister of Revenue Stuart Nash read out quite a list of other things the Bill does which included:
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Changes to how IRD manages people’s information and privacy.
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Clarifying the repeat collection of third-party databases.
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Allowing IRD to offer binding ‘short-process’ rulings on its interpretation of the rules.
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Secondary employment rate changes to prevent over-collection.
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Automatic tax refunds.
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Kiwisaver employee contribution rates of 6 and 10 percent.
The opposition were in support of many aspects of the bill, but not the big one - the tax rates.
Amy Adams, National's Finance Spokesperson Photo: VNP / Phil Smith
“We will oppose the Bill because the core part of this bill fundamentally is still setting the annual tax rates. It's all right there in the title, as it says on the tin. It sets the annual tax rates. And this side of the House is not going to vote in favour of legislation which overtaxes New Zealanders,” said Amy Adams.
Ultimately it did pass, and Parliament gave the Government permission to collect this revenue.
Which is one half of the approval equation. The Government also needs approval for spending; how it plans to spend money (the budget), and how it did spend money - which brings us to another bill in the House this week.
The Appropriations (2017/18 confirmation and Validation Bill looks back on the ending financial cycle and approves the Government’s spending (and performance).
In April or May there will be a 10 hour long debate over this bill bringing together all the annual reviews of government performance and finances that select committees are hard at work on right now.
So that’s something to look forward to.
