Labour is launching a new proposal to give businesses more flexibility and control over when they pay their tax, Opposition Leader Andrew Little announced today.
“Today I am launching a discussion document to give businesses the option of paying their income tax through a system similar to PAYE called Flexible Tax for Business.
“Business people know their business better than the IRD so Labour wants to let business owners tailor their tax payments to fit their cash flows.
“Small businesses frequently tell me one of their biggest bugbears is how difficult it is to pay provisional tax.
“Under the current system they are forced to guess their annual income and pay tax in three large instalments throughout the year. If they guess wrong, they can be faced with a big bill at the end of the year which can push a small business to the wall.
“Under Labour’s proposal, businesses will have the option of choosing to pay their tax through regular instalments at a rate they can adjust. This means businesses can align their payments to suit their circumstances.
“To further help our businesses get ahead, our proposal scraps harsh late penalties for provisional tax, and raises the level at which provisional tax kicks in from $2500 to $5000.
“Flexible Tax for Business is about giving our businesses more control over how they pay tax. That’s how we will help them do well, grow and create jobs.
“From here, we will be sending out the discussion document for feedback from business owners around the country on how we can improve the proposal before we take it into the 2017 election,” says Andrew Little.
To view Labour's discussion document click here.