Dunne Peter: Taxation (Consequential Rate Alignment and Remedial Matters) Bill — In Committee Third Reading 
Text is incorporated into the Bound Volume 
Dunne Peter: Taxation (Consequential Rate Alignment and Remedial Matters) Bill — In Committee Third Reading 
[Sitting date: 24 November 2009. Volume:659;Page:8243. Text is incorporated into the Bound Volume.] 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Taxation (Consequential Rate Alignment and Remedial Matters) Bill be now read a third time 
. This bill’s content is technical in nature. It introduces a number of measures to fine tune earlier changes to the tax rules. I will speak very briefly about these. 
The principal feature of the bill is the alignment of the resident withholding tax rates on interest with recent changes to personal tax rates and the 30 percent company tax rate introduced last year. As a complementary measure the bill also aligns the portfolio investment entity tax rates with the new personal tax rates so that portfolio investment entity rates will be 12.5 percent 21 percent and 30 percent. It also adjusts the income thresholds at which the portfolio investment entity rates apply so as to ensure that people who invest in portfolio investment entities are not disadvantaged relative to direct investors. Other minor changes have been made to help reduce compliance costs for taxpayers and to smooth the Inland Revenue Department’s administrative functions including allowing the Inland Revenue Department to accept corrections of minor errors in subsequent returns and allowing tax agents more time if needed to allocate beneficiary income. In addition to these changes the important Supplementary Order Paper 93 in which several urgent tax measures are proposed has been added to the bill. 
The first of these measures proposed under the Supplementary Order Paper deals with the longstanding debate that has surrounded the GST treatment of facilitation services for tour packages for overseas visitors to New Zealand. Under the changes proposed these services will be subject to GST at the standard rate of 12.5 percent but the legislation also includes a transitional provision allowing inbound tour operators to zero-rate these services for the year ended 1 July 2008 which will help minimise any adverse affects on any inbound tour operators including those operators who did not zero-rate services for that year. The second item proposed under the Supplementary Order Paper makes changes to the supplementary dividend rules in the Income Tax Act to allow newly signed tax treaties with Australia Singapore and the United States to come into force. The third set of changes introduced by the Supplementary Order Paper and which I should make reference to will ensure that the recipients of New Zealand’s superannuation and the veterans pension will remain subject to New Zealand tax while they are travelling overseas but if they decide to live overseas the pensions will not be subject to New Zealand tax. 
I want to record my thanks to all of those who have worked on the passage of this bill so far. My particular thanks are due to the Finance and Expenditure Committee members for their consideration of the bill for passing the test and for the recommendations that they put forward to improve the outcomes for taxpayers. I also thank the drafters and the policy officials who worked on the detail of the bill those who made submissions on the changes it proposes and to everyone who took an interest in it. Finally I thank those members of the select committee and those members of the House who have contributed to the debates on the bill for their input and for their contribution to its progress. I am more than happy to commend the bill to the House.