Bayly AndrewANDREW BAYLY (National—Hunua): It is pleasure to be talking on the Taxation (Annual Rates for 2016-17 Closely Held Companies and Remedial Matters) Bill. In the Finance and Expenditure Committee—and some of its members are in the House tonight which is good to see—we have considered a number of different tax matters during the course of the year all seeking to continue to improve our tax system to make it simpler and to maintain its integrity. It is a continual evolution of what we are trying to do with our tax system.I would have to say that most people around the world look at our tax system and regard us with a sense of envy because we have a very simple clear tax structure. At a personal tax level we only have four different tax levels. Company tax is very simple to understand and partnerships and all those types of arrangements are very very simple. That has been an ongoing process of this Government to make sure that what we have in place is something that people can understand easily engage with and so can pay their due taxes. I would hasten to note that the Inland Revenue Department is undertaking one of its big transformation projects at the moment—a billion-dollar project—and the first roll-out of that will be changes to the GST regime next year which is going to make it a lot easier for companies and smaller companies in particular to meet their commitments around GST. Ultimately we also want to see smaller businesses paying their taxes as they go. This pay-as-you-go system is moving away from a provisional tax system and I think it is a very good measure that was introduced in the recent Budget.This particular bill deals with a few changes. First of all it mends the Income Tax Act 2007 the Tax Administration Act the Goods and Services Tax Act the Stamp and Cheque Duties Act the Student Loans Scheme Act the Income Tax Act 2004 and also the Goods and Services Tax (Grants and Subsidies) Order 1992. There are particular things that I just want to focus on. At a high level the bill is first of all about constraining reducing or correcting issues relating to land tainting. Second it is about ensuring that the Working for Families tax package is maintained; we know how important that is to most New Zealand families and we want to make sure that the package continues to operate in the way that it should to support our lower-income families. Third it introduces allows or permits 14 new charities. As you are probably aware charities are reviewed every year. I think from memory there are about 2500 that are reviewed to make sure that they are of a charitable status and meeting their commitments. As a result of that there are 14 new charities being introduced this year. The bill also seeks to set the income tax levels for the 2016-17 financial year which of course is essential for the Government if it is to continue to remain in business and do all the good things that it is trying to do.I just want to focus on a couple of little issues. One is that we are changing the rules relating to look-through companies. As many of you are probably aware they are similar to partnership arrangements. We are making some specific changes around them to make sure that people are taxed at their personal level and the complexity around those look-through companies is reduced. The second thing is that we are specifically targeting where non-residents have provided debt to a New Zealand entity—it might be a branch or some structure here in New Zealand—to make sure that appropriate interest is being paid on that. I am sure that the Opposition will be very pleased to hear about that measure. We want to make sure that non-resident withholding tax is paid for related party debt where it involves non-residents. We are also making changes around deducting GST on capital raising costs. Most companies going out capital raising would normally get professional advice for this. They need to be able to get that advice and normally it comes at a cost with GST. We are making sure that that is standard and that companies actually have the ability to deduct that GST because at the moment they cannot deduct the GST portion. We are making some changes and technical amendments around aircraft maintenance. Those are the key aspects of this bill. I look forward to working with the committee and the House as we work through this process.