English Bill: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — In Committee 
English Bill: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — In Committee 
[Volume:622;Page:17370] 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 This part includes the early payment discount of income tax which I guess sounds a lot better than it actually is when one goes through it. 
Hon Dr Michael Cullen 
: Oh be generous go on! 
Hon BILL ENGLISH 
: Well if one gets a 6 percent discount one has to pay the other 93.3 percent a year earlier than one is liable to pay it. So it is not a measure that I think too many small businesses are going to take hold of. But there is one interesting point under clause 193 which inserts new subpart MBB. In MBB 4 “Some definitions” it states that a small-business taxpayer means a taxpayer who is a sole trader or partner and “does not use a company or a trust in the conduct of the business”. Now why is that? Why is it restricted to sole traders who conduct business on their own account or as a partner and it is not available to anyone who uses a company? Using a company has become less expensive and easier since the abolition of stamp duty because the Companies Office got its act together and now runs a very low-cost register of companies and it is actually popular even for sole traders. So I would be interested in why that is. Why are small businesses who operate as companies excluded? 
In fact I would have to say that I was surprised to see how narrow the definition of a small business is. This was sold as a major step forward in small-business compliance. We find though that it is restricted to quite a narrow group of business owners and I would like to know just what that is. The group is narrowed even further by saying that the small-business taxpayer is someone who derives assessable income that is predominantly from the business so that cannot be someone who is paid a wage or a salary I presume even by the business. If one is a PAYE taxpayer—more than predominantly I suppose means more than half—then that person does not qualify and it is not allowed to include dividends royalties rents or beneficiary income. That is a bit more understandable. But I would like to know why companies are banned. That is what I would like to know. 
I also have another question for the Minister and maybe officials can answer this. In the commentary on the bill there is a whole page on the use of the colon. I thought I would try to find an example where that commentary was warranted; and about why colons are so important in tax legislation. We find that New Zealand is unique in the world in the way that it uses colons and colons in tax legislation in New Zealand mean “not ‘and’ nor ‘or’ ”. That is what they mean. In clause 180 we see a colon being put in where there was not one before. So I would like the Minister to explain the difference in respect of clause 180 “Distributions by Maori authority” when it states: “In section HI 4(1)(e) `consideration.’ is replaced by `consideration:’.” 
Hon Dr Michael Cullen 
: You have the point. 
Hon BILL ENGLISH 
: So I have the point of it? So it is not “and” nor “or”  after “consideration”? Well given that there is a whole page of commentary on it I presume that that must be significant because it is unusual to see tax officials discursive on punctuation and given the other weighty matters in here I would like to know just why— 
Progress reported. 
Report adopted.