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Swiss tax agreement tightens net

Opportunities to dodge tax are shrinking with the completion of a new tax agreement with Switzerland, Revenue Minister Stuart Nash announced today.

Mr Nash and the Swiss Ambassador David Vogelsanger have today signed documents to update the double tax agreement (DTA). The previous DTA was signed in 1980.

“Double tax agreements are good for business because they reduce barriers to trade and cross-border investment, eliminate double taxation, and reduce withholding taxes,” Mr Nash says.

“DTAs are also an extremely valuable tool to crack down on tax avoidance and tax evasion. They establish a formal means to exchange information between two countries.

“New Zealand has 40 DTAs. It is easier to update them since the OECD and G20 nations increased the focus on multinationals who often seem to not pay tax anywhere in the world. This led to the base erosion and profit shifting (BEPS) initiative which the coalition government ratified last year. The DTA with Switzerland includes BEPS measures.

“The new agreement includes provisions to reduce multinational tax avoidance by incorporating base erosion and profit shifting measures.

“In the year to March 2018, total New Zealand investment in Switzerland was approximately $246 million, while total Swiss investment in New Zealand was $2,290 million.

“Meanwhile work is also progressing on a protocol to the existing Tax Information Exchange Agreement with Guernsey and this should be concluded in the near future.

“With the work we’ve already done and the steady ongoing work to update our DTAs, the anti-BEPS net is closing ever tighter. The opportunities to dodge tax are vanishing,” says Mr Nash.

The text of the agreement with Switzerland can be found at http://taxpolicy.ird.govt.nz/tax-treaties/switzerland

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Maintaining momentum for small business innovation

Small Business Minister Stuart Nash says the report of the Small Business Council will help maintain the momentum for innovation and improvements in the sector.

Mr Nash has thanked the members of the Small Business Council (SBC) who this week handed over their report, Empowering small businesses to aspire, succeed and thrive.

“I appointed the members of the SBC in August 2018 with one primary objective. I asked them to help government develop a strategy to drive performance and innovation for small and medium enterprises,” Mr Nash says.

“While the SBC has been working on its report, the government has kept up momentum on business-friendly initiatives.

“We are offering new incentives for research and development; taking action on unfair commercial practices; improving access to venture capital; encouraging innovative use of technology like e-invoicing; bringing greater fairness to the tax system especially where multinationals compete with local firms; and improving infrastructure in the regions.

“These initiatives that are already underway will create a productive, sustainable and inclusive economy that will benefit all New Zealanders, especially small business owners and people employed in small businesses.

“I look forward to now considering the SBC report, which contains 20 recommendations to complement our work programme.

“I will take the time to talk to colleagues across government about how best to drive progress and use the SBC’s work to support the Prime Minister’s Business Advisory Council, which includes SMEs as a priority.

“As well as developing a small business strategy the SBC also provided advice on support structures for the sector, methods of defining and capturing data on small business, and ways to continue the work programme initiated by Council members. 

“I would like to thank the SBC for its hard work over the past year.  Its recommendations are wide-ranging and touch on the work of many different portfolios and agencies.

“Small businesses are a vital part of our economy and way of life. They make up 97 per cent of all businesses and employ more than 600,000 people. By taking steps to drive performance and innovation, we can make real progress for the people who run small businesses and the communities they contribute to,” Mr Nash says.

The SBC report and the government response are expected to be released in the next couple of months.

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Seventy-eight new Police constables

Extra Police officers are being deployed from Northland to Southland with the graduation of a new wing of recruits from the Royal New Zealand Police College.

“The graduation of 78 constables today means that 1524 new constables have been deployed since the government took office,” says Police Minister Stuart Nash.

“One quarter of today’s new constables will be deployed to our largest Policing district, Counties Manukau. The remainder will commence duties on 12 August in towns from the far north to deep south and all across regional New Zealand.

“It is important for Police to maintain an active and visible presence in neighbourhoods all over the country. The success of the firearms buy-back and amnesty in many small towns has highlighted the strong relationship between local police and communities.

“Reports from towns like Piopio, Waipu, Fairlie and Picton show conversations between police and gun owners are positive and engaging. Many officers graduating today can expect to play a part working alongside communities to remove the most dangerous firearms from circulation.

“The buyback is also making the everyday job of Policing much safer for our new recruits. Every month Police are called out to 200 crimes involving firearms. Every year up to 1000 guns are reported stolen from licensed owners. Many disappear into the hands of gangs.

“Today’s new constables will help tackle gang-related crime and reduce harm from drugs like methamphetamine. They are also increasingly supporting vulnerable communities. Last year Police responded to 33,000 mental health callouts, an 11 per cent increase.

“Wing 328 continues the strong commitment to increased diversity in our Police. Just over 30 per cent are women, 13 per cent Maori, ten per cent Pasifika, and six per cent identify as Asian. The youngest is 19 and the eldest is 50 years old. Between them they speak eight languages other than English. Their sporting and cultural achievements include a professional rugby player, an Olympic swimmer, and a waka ama champion.

I also want to personally acknowledge and thank the wing patron, journalist and community leader Venkat Raman. He has long supported the work of Police through advisory forums, and been a great mentor to the recruits during their training.

 ENDS

 The constables are being deployed to Police Districts as follows:

Northland – 2
Waitematā – 12
Auckland – 2
Counties Manukau – 19
Waikato – 7
Bay of Plenty – 6
Eastern – 4
Central – 5
Wellington – 7
Tasman – 2
Canterbury – 7
Southern – 5

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Tax refund season ends near $600 million

Almost $600 million has been paid into taxpayers’ bank accounts in the past two months, after the first season of automatic tax assessments.

Revenue Minister Stuart Nash says the completion of this year’s tax refund season is a significant milestone.

“The ability of Inland Revenue to run auto calculations for the first time reinforces efforts to ensure everyone pays their fair share of tax. The refunds are $188 million higher than last year,” Mr Nash says.

“Gone are the days of effectively having to apply for a refund. If you pay too much tax throughout the year, we can now refund that money straight to your bank account. The process is also faster for many taxpayers.

“We have just proved that the auto-calculation system is possible and I’m pleased with what we have achieved in the first tax refund season. Refunds have been difficult for many taxpayers to figure out in the past.

Inland Revenue has completed assessments for 2,579,172 customers since the end of May, which include:

  • 1,330,484 refunds
  • 270,952 bills to pay
  • 882,682 customers who have a refund of less than one dollar or who have had a small bill written off
  • 95,054 customers either paid exactly the right amount of tax over the year or had no income over the period.

“The total value of refunds so far is $572 million with an average payment of $430. There are bills to pay worth $95.5 million with an average amount owing of around $353. Those bills don’t fall due until 7 February 2020.

“Automatic tax assessments are possible because of changes to tax legislation which were opposed by the National Party. Its attempt to stand in the way of improvements for hard-working kiwis shows it cannot be trusted to deliver on the question of tax fairness.

“The coalition government has worked hard to improve the fairness of the system. Further changes, such as the removal of unnecessary secondary tax codes and the ability to ensure people are on the correct Prescribed Investor Rates, will ensure more New Zealanders pay the right amount of tax at the right time,” Mr Nash says.

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Strong first week of firearms buy-back events

The first full week of the firearms buy-back and amnesty has produced a strong turnout as events roll out nationwide for the first time.

“Momentum is slowly starting to build as community collection events are held across the entire country, says Police Minister Stuart Nash.

“After the first collection in Christchurch last weekend, Police held 24 further public collection events from Northland to Otago and from the West Coast of the South Island to eastern Bay of Plenty. Seven were held today.

“Provisional figures show 2143 firearms owners have participated since the buyback got underway, handing in 3275 firearms, 7827 prohibited parts and accessories, and receiving payments of $6,185,768 in compensation.

“The strongest turnout for a single day was at Mount Smart Stadium in Auckland today, where 240 people took part, handing in 405 prohibited firearms and 1343 parts and accessories.

“There has also been a steady response at events in some of our smaller centres over the past few days, like Waipu, Te Aroha, Ohope, Hokitika and Mosgiel.

“Local Police commanders at each event are consistently reporting the same response: firearms owners want to do the right thing. Many events have seen people queuing before the doors open, ready to hand in firearms, parts and ammunition.

“In my own community of Hawke’s Bay, Eastern District Commander Tania Kura reflected a view common around the country. Superintendent Kura noted some gun owners turn up feeling a little apprehensive, but once they get inside they find Police make it go smoothly, it is easy to understand, and they get a fair price.

“Police are working hard to get alongside gun owners and are committed to treating those going through this process with respect, patience and understanding. They say the conversations they have had with many gun owners have been positive and engaging.

“I am full of praise for the way gun owners and Police are managing this process. New Zealand has never run a gun buyback and amnesty before. Police officers and staff have put a tremendous effort into planning for this, and firearms owners are responding in kind.

“This was never aimed at the vast majority of law abiding gun owners. They have done nothing wrong. The law changed and they now hold prohibited weapons. However after the terror attack of 15 March we had to act to remove the most dangerous weapons from circulation,” Mr Nash says.

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New digital service to make business easy

A new digital platform aims to make it easier for small businesses to access services from multiple government agencies, leaving them more time to focus on their own priorities.

Prime Minister Jacinda Ardern and Minister for Small Business Stuart Nash announced details of the new Business Connect platform, which received $7.1 million over two years in Budget 2019.

“Business Connect will enable businesses and government agencies to work together smarter. Our objective is to integrate access to multiple services through a single digital platform, and cut out repetitive paperwork,” Jacinda Ardern says.

“We want to make the relationship easier with all levels of government. Business Connect will allow small businesses to interact seamlessly via a single portal. In time it will streamline the way central and local government services can be applied for, managed and tracked.

“Our priorities in this year’s Budget are to create opportunities for productive businesses and to support them to thrive in the digital age, through innovation. The new Business Connect platform will support businesses wherever they are in New Zealand.

“The pilot platform is expected to be available from October and will initially trial services from three core agencies: the Ministry for Primary Industries, the Ministry of Business Innovation and Employment; and NZ Customs Service.

“In time businesses will be able to apply for a range of permits, licences and consents, without having to repeat the same information and documentation over and over. Examples could include services that help make it easier to comply with food safety regulations.

“The pilot agencies will allow the platform to be tested in a real world environment directly with businesses. Other central and local government agencies will gradually come on board over two years,” Jacinda Ardern says.

“Businesses tell us they sometimes find public services complex to navigate and fragmented,” says Stuart Nash.

“Some small operators say it takes more time than it should to deal with paperwork. They say they often have to repeat the same information and feel there could be better co-ordination across government. We have heard their appeals and are responding.

“Business Connect will allow a business to log on to a customised dashboard. They can update their information in one place and share that information across multiple agencies. They will be able to track the status of their applications and be notified online of approvals and renewals.

“Businesses will get a head start if they have registered for a New Zealand Business Number, which will be used to pre-populate their details on the platform. Other tools to support business planning are available on the business.govt.nz website.

“Central and local government agencies that join Business Connect will be able to follow common templates and rules in order to design and deliver more integrated digital services. Some smaller local councils in particular will find this a very attractive and easy system to be part of.

“New Zealand consistently ranks number one as the easiest country to do business. But there is still progress to be made. The Business Connect platform transforms government services from manual and paper-based, to more joined up and business-centric”, Mr Nash says.

ENDS

Questions and Answers

 What sort of businesses is this aimed at?

Small businesses in particular will benefit, especially those who require a permit or license to operate. The hospitality sector is a prime example. Business Connect will be available for any sort of business. Start-up companies, limited liability companies, sole traders, trusts, partnerships, contractors, tradespeople, and self-employed. As more government agencies digitise their business services onto Business Connect, the better it will become.

  1. What is the estimated benefit to businesses and government agencies?

MBIE estimates potential benefits worth $300 million per annum through reduced time and effort in compliance administration, faster processing of applications, less scope for errors, and increased business productivity.

  1. Who are likely to be the next government agencies to join Business Connect?

Business Connect is a core initiative within the cross-agency Better for Business programme led by MBIE. Participating agencies include IR, ACC, MPI, Customs, NZTA, StatsNZ, WorkSafe, NZTE and Callaghan Innovation.

These agencies account for around 83% of business interactions with government, and local government makes up another 10%. We will be actively working with these agencies and local government on the services that make the biggest difference to businesses.

  1. How does local government fit into the Business Connect platform?

The platform is designed for local government as well. MBIE officials are working with a local government agency which is expected to join the pilot before the platform goes live in October.

Once the pilot has been tested with businesses and the core central government agencies, other local government agencies are expected to come on board in early 2020.

  1. Who will build the Business Connect platform?

After a competitive tender process, Datacom was selected by MBIE and the first participating agencies. The cloud-based platform will use Pega System software, which uses low-code modular case management applications.

  1. How will users find and use the platform?

Businesses will log on to Business Connect via the participating government agency they deal with, or though the business.govt.nz. It will verify the user’s identity through RealMe. Once a user logs on they will be able to delegate some permissions to staff. Technical support will be provided from the government agency dealing with the application for a permit or licence.

 

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Million-dollar start to gun collection events

Million-dollar start to gun collection events

 Police Minister Stuart Nash says a solid start has been made to the gun buyback and amnesty after the first weekend of community collection events.

“Gun owners will walk away with more than $1 million in compensation after this weekend. The first payments are expected to land in people’s bank accounts over the next few days,” Mr Nash says.

“Police are very encouraged by the response to the first public events at Riccarton Racecourse in Christchurch. More than 250 further events are planned for the first half of the amnesty, and more will be scheduled.

“Today’s efforts surpassed the turnout on Saturday and I want to repeat my praise for both Police and firearms owners who made this happen.

“The feedback to Police has been very positive. Gun owners say the process is easy and straightforward and the compensation they received is fair.

“Provisional figures show that 378 people took part over the course of the weekend. A total of 542 firearms were handed in, along with 578 prohibited parts or accessories. Payments worth $1,022,599 were processed.

“The next collection event is on 17 July at Waipu in Northland. After that every Police District around the country will hold events over the weekend of 20-21 July.

“I encourage firearms owners to prepare beforehand using the online form. Others with firearms or parts they wish to dispose of during the amnesty can also drop them off at the collection days, no questions asked.

“Information about the collection events is being regularly updated on the Police website, and people can also phone the 0800 311 311 number for more details.

“The terror attack on 15 March is the reason we changed our laws. We know the vast majority of gun owners are law abiding and the changes are not aimed at them. They did nothing wrong. But we must act to remove the most dangerous weapons from circulation,” Mr Nash says.

Information about collection events is at: https://www.police.govt.nz/advice/firearms-and-safety/changes-firearms-law-prohibited-firearms/local-collection-events-amnesty

 

 

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Praise after first firearms collection event

Police Minister Stuart Nash has praised Police and gun owners after the first firearms collection event saw a busy turnout at Riccarton Racecourse in Christchurch.

“Police officers and staff have put a tremendous effort into planning and logistics for the first event in the six month amnesty. More than 250 others are scheduled,” Stuart Nash says.

“Payments worth more than $430,000 have been processed today and should be in people’s bank accounts within the next few days.

“New Zealand has never run a gun buyback and amnesty before. Months of work has been invested and it has paid off.

“Many of those who handed over firearms commented how easy the process is, how the prices are fair, and how Police made the whole event go smoothly. Police say the feedback has been very positive.

“I also want to thank the people of Canterbury who turned up today. Police are working alongside firearms owners to help them do the right thing.

“We have consistently acknowledged the vast majority of firearms owners are law-abiding. They have done nothing wrong. The law changed and now they hold prohibited weapons. This was never aimed at them. It was designed to ensure the events of 15 March in Christchurch do not happen again.

“The results from the first collection are very encouraging. The early figures indicate people were coming through the door faster than one every two minutes. A prohibited firearm or part was handed in at a rate of more than one a minute. Payments were processed at a rate of more than $1400 per minute.

“The government has put aside more than $200 million for payments and administration of the gun buyback and amnesty. We will top up that figure if required.

“Another collection event will be held at Riccarton Racecourse tomorrow and I encourage owners of prohibited weapons, or others who just want to dispose of items during the amnesty, to prepare in advance and go along,” Mr Nash says.

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New Police constables deployed to regions

Seventy-eight new Police constables are heading out to the regions following today’s graduation of a new recruit wing from the Royal New Zealand Police College.

Police Minister Stuart Nash says the record high number of new Police officers being recruited, trained and deployed means a new recruit wing is graduating every month.

“In the new era of a heightened threat level we need these new frontline officers as we step up our efforts to keep communities safe and prevent crime,” Mr Nash says.

“Today’s graduation means 1446 new frontline officers have been deployed since the coalition government took office. A further 240 are currently training in other recruit wings in Wellington and Auckland.

“The extra resources help Police expand their work with the most vulnerable in our communities, in line with the coalition government’s wellbeing focus.

“Police are working tirelessly to keep our communities safe. The new officers who graduate today from Wing 327 begin work on 15 July, just as community collections get underway during the firearms buy-back and amnesty.

“In Budget 2019 we invested $168 million to take the most dangerous weapons out of circulation. ACC has also stepped up with a further $40 million dollars for the buy-back, in recognition of the human cost of firearms-related injuries and deaths.

“Today’s new constables will also help tackle organised crime, gangs, and drugs. These are priorities and Police are making inroads as they work to reduce harm from methamphetamine and other drugs.

“Police are also increasingly responding to mental health needs. They were involved in almost 33,000 mental health calls in the year to April, an increase of eleven per cent on the previous year. The Budget increased support for frontline mental health services by $455 million.

“There is great diversity in the constables who graduate today. Female constables make up 36 per cent of the recruits, 19 per cent are Maori and eight per cent are Pasifika. The youngest is 19 years old and the oldest is 41.

“There is once again a strong tradition of community service and volunteering amongst our new constables. Many are accomplished in sports and cultural fields, including a US-born constable who made a living as a professional skateboarder as a teenager.

“I also want to thank the wing patron, Dr Lance O’Sullivan, who was a great mentor to the new constables and shared advice and encouragement during their four month training course,” Mr Nash says.

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Compliance strengthened for property speculation

Inland Revenue is to gain greater oversight of land transfer information to ensure those buying and selling properties are complying with tax rules on property speculation.

Cabinet has agreed to implement recommendation 99 of the Tax Working Group’s (TWG) final report. It will require most people who buy and sell properties to supply their IRD number on land transfer documentation.

Revenue Minister Stuart Nash says the TWG made the recommendation after hearing submissions on ways to improve the fairness, balance and structure of the tax system.

“Most people already provide their IRD number to Land Information NZ (LINZ) when buying and selling property, but there are some exemptions which are open to manipulation,” says Mr Nash.

“Up to one-third of land transfers are made without a record of the IRD number of the buyer or seller.

“Inland Revenue needs a complete picture of property transactions to determine if tax rules are being manipulated. The requirement for nearly all land transfers to include an IRD number is a small change but improves the overall integrity of the system.

“If a home owner regularly buys and sells their properties in a short time frame it suggests they are engaged in property speculation and are flipping properties with the intention of creating income.

“When the previous government introduced the bright line test in 2015, it made it clear that owner-occupiers with a regular pattern of buying and selling residential properties had to comply with the bright line rule in certain circumstances.

“If an owner-occupier buys and sells properties twice or more in two years, under existing law they are generally considered to be trying to manipulate the bright line test.

“The requirement to provide an IRD number on nearly all land transfers makes the rules easier to understand for everyone. It removes uncertainty around what information people need to provide when buying or selling a property. 

“Capturing the relevant tax information for property sales will also help us work with jurisdictions in other countries to combat global tax evasion,” says Mr Nash.

A Supplementary Order Paper has been tabled today to make the change to the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill currently before Parliament. It will apply from 1 January 2020.

A small number of land transfers do not require the provision of an IRD number. Examples include land transfers under a Treaty settlement or by a local authority.

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