Heatley Phil: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — Third Reading 
Text is incorporated into the Bound Volume 
Heatley Phil: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — Third Reading 
[Sitting date: 25 October 2012. Volume:685;Page:6236. Text is incorporated into the Bound Volume.] 
Hon PHIL HEATLEY (Minister of Energy and Resources) 
 on behalf of the Minister of Revenue: I move  
That the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill be now read a third time 
. I will provide a brief recap of the main features of this bill. The bill addresses the costs of record-keeping for businesses by allowing electronic tax return filers to retain copies in an electronic rather than a paper format thus modernising record-keeping requirements and reducing record-keeping costs. 
Mike Sabin 
: Very good. 
Hon Maurice Williamson 
: A thoroughly modern Minister. 
Hon PHIL HEATLEY 
: The bill will bring greater equity to the tax returns filing system by tightening the rules which currently allow salary and wage earners who are not required to file a tax return to select individual advantageous years in which to square up their tax obligations—that is the years they are entitled to a tax refund. When selecting a favourable year for a tax square-up this bill proposes that taxpayers will be required to have their tax obligations squared up for each of the previous 4 years as well. 
Mike Sabin 
: Very good. 
Hon PHIL HEATLEY 
: Another proposal in this bill will give businesses greater certainty over the tax treatment of costs incurred on software development projects— 
Hon Maurice Williamson 
: Now you’re talking. 
Hon PHIL HEATLEY 
: —that are unsuccessful by allowing an immediate deduction for expenditure incurred in the year the development is abandoned. Changes are proposed to KiwiSaver to make the scheme more sustainable by increasing private contributions. The employer and employee contribution rates will increase from 2 percent to 3 percent from April 2013. The bill also addresses the tax treatment of profit distribution plans proposing that shares issued under profit distribution plans be treated as a taxable dividend. This will ensure consistency of treatment with other similar arrangements while also improving the integrity of the tax system. A number of GST-related changes which largely deal with technical matters resulting from rules introduced last year to prevent phoenix fraud schemes are included in the bill. These are the main features of this omnibus bill. 
In addition a Supplementary Order Paper to this bill Supplementary Order Paper 98 made a number of amendments. These included earthquake-related measures to address issues raised by Canterbury people—Cantabrians. In particular these issues relate to the tax treatment of damaged or destroyed assets and insurance payouts. The Supplementary Order Paper also contained a number of remedial items to ensure that the international tax rules are working as intended. In particular changes have been made to relieve overtaxation of interests in controlled foreign companies by better aligning the tax treatment of income and related deductions. 
I would like to express my grateful thanks to the many submitters to this bill whose efforts have helped shape the bill before us. My thanks go also to the officials and drafters for their work on this bill which will help improve the integrity of the tax system and improve fairness. Thank you also to the Finance and Expenditure Committee for its good work on this bill and for its recommendations. Thank you to the Hon Maurice Williamson and Mike Sabin for their support for this bill. Once again I commend the Taxation (Annual Rates Returns Filing and Remedial Matters) Bill to the House.