Foss Craig: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — In Committee 
Foss Craig: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — In Committee 
[Volume:644;Page:13718] 
CRAIG FOSS (National—Tukituki) 
: 
 I welcome the welcome from those members on the other side and I would like to note that we are under urgency at the moment. The only good thing about urgency is it gets the members on the other side of the Chamber to work before lunchtime. I say good morning to Mr Swain in particular and I am sure my fellow Finance and Expenditure Committee members will comment on that one later. 
Part 2 deals with the nuts and bolts of this legislation although as I noted last night it is a moving feast. I presume it will not change much from the version for which we have had notice in total of not even 12 hours yet which as I have noted quite frankly I find a disgrace and not a good look for Parliament at all. 
Part 2 talks about tax credits tax rebates etc. and I think it is important to note two things. The attraction of a tax credit a tax rebate be it a research and development credit or be it a rebate as mentioned in Parts 1 and 3 and on Supplementary Order Paper 167 is that the higher the tax burden the more attractive are rebates and credits and special favours. As previous speakers have noted around various bills covering KiwiSaver taxation etc. many submitters to the Finance and Expenditure Committee are now saying essentially “me too” because they would like a share. 
I think it is important also to note that the Inland Revenue Department has had a lot to do with the formulation of this bill and it will be administering it and the Minister of Revenue is in the Chamber and to note two of the key points of the “desired future” of the department. The second major point—and there are five of them—is that the Inland Revenue Department’s desired future is: “We make it easy for customers to get it right and hard to get it wrong.” Well after I do not know how many pages of a bill plus the Supplementary Order Papers I think that is around the wrong way at the moment. The redundancy rebate was announced yesterday—in fact the Minister himself talked about a simpler less complex regime. Essentially he argued for a flat tax on redundancy payments but we will talk more about that in Part 3. 
I also note that Dr Lockwood Smith’s Supplementary Order Papers tried to address issues where that regime is not made easy. Also the fifth point in the “desired future” of the Inland Revenue Department states: “We are professional approachable effective and efficient.” 
I have talked about a few of the clauses in Part 2 particularly clause 147 which is about the keeping of business records. The majority voted for a change to the heading to section 22 in the principal Act from “business records” to “business and other records”. On a first look that is fair enough. Perhaps it is a modernisation. It is a different way of keeping records or is it spreading the tax matrix even wider and higher and longer and deeper? In fact what are “other records”? To me that reads as: “Just hand over any all and total information about your relationship.” particularly as it concerns superannuation contribution resident withholding tax rules. 
We have had a recent example of the Inland Revenue Department putting the onus on and increasing the cost structure—and the Minister touched on it before—around the fair dividend rate changes of last year. He mentioned that there were worries at the time that the earth was going to freeze over etc. Actually the costs have gone up because the onus there was that the record keeping had to go back to the year dot in order to claim the $50000 de minimis for the various fair dividend rate issues in the earlier taxation bills. 
Clause 147C which inserts a new section 28B into the principal Act again puts the onus further down the track where the investor again changes to the portfolio investment entity regime: “Investor to advise portfolio tax rate entity of investor’s tax file number”. Again on the face of it most people accept that. I think it is on our bank statements now. But actually must we do that? There are already provisions. There is a 45c tax rate to be charged if people do not do that—it is the non-declared tax rate and tax code. I do not quite understand why that might be there. Perhaps there is a simple answer and the Minister could address it.