Inland Revenue will waive use of money interest on late tax payments when flooding has prevented people from paying on time, say Lead Minister for Edgecumbe Anne Tolley and Revenue Minister Judith Collins.

“In the aftermath of the Edgecumbe and Bay of Plenty floods businesses in affected areas have enough to deal with without having to worry about their tax obligations at the same time,” Mrs Tolley says.

“Inland Revenue will waive use of money interest on late tax payments and will  cancel late filing and late payment penalties for taxpayers who are unable to pay their tax by the due date because of the recent flooding,” Ms Collins says.

The terminal tax date for the 2016 income year for taxpayers with tax agents was 7 April, and 20 April is a due date for employers.

Inland Revenue has also announced discretions on income equalisation for farmers who are significantly affected by the flooding. 

“This will allow people to make late deposits from the 2016 income tax year and to apply for early refunds. This means farmers and fishers can average their taxable income over several years more easily,” Ms Collins says.

Energy and Resources Minister Judith Collins has today announced the appointment of two new members to the Electricity Authority.

The Electricity Authority is an independent Crown entity established in November 2010. 

It is responsible for governance and regulation of the electricity market and its objective is to promote competition, reliable supply, and the efficient operation of the electricity sector for the long term benefit of consumers.

Allan Dawson and Sandra Gamble have been appointed for terms of five years each commencing 18 April.

“Both Allan and Sandra have held director, chair and executive positions and will be excellent additions to the Electricity Authority.

“Allan brings extensive knowledge of the New Zealand electricity market as well as understanding of the global energy environment and its impact here. Sandra brings significant experience of working within the energy and water sectors and has insight into the critical issues facing the New Zealand industry.”

Ms Collins says the Authority will benefit from having its vacant board position filled, with its substantial work programme progressing steadily. 

There will now be six members of the Authority, with the others being Dr Brent Layton (Chair), David Bull, Susan Paterson and Hon Roger Sowry.

Background information on appointees:

Allan Dawson

Allan Dawson is the current Customer Manager for New Zealand Trade and Enterprise. He was formerly the Chief Executive for the Independent Market Operator in Western Australia, and the Energy Market Company in Singapore, and worked on the development of New Zealand electricity industry rules and arrangements in the 1990s. He has chaired the Association of Power Exchanges, and two bodies in Western Australia: the Market Advisory Committee for the Wholesale Electricity Market and the Gas Advisory Board. He brings strong governance, leadership, communication and relationship management skills, and experience in roles that directly interface with energy regulators.

Sandra Gamble

Sandra Gamble is currently a non-executive director, with roles as an Independent Advisor to the Audit and Risk Committee at Sydney Metro, and Director of the Woodville Alliance, as well as Chair of its Audit and Risk Committee. She was formerly the General Manager for Business Strategy and Resilience for the Sydney Water Corporation, where she held various committee Chair and Executive Convenor positions, and a director of Save the Children Australia. She is an electrical engineer with significant experience working in the energy and water sectors, and brings strong leadership, communication and relationship management skills.

A new tax bill introduced into Parliament today will help modernise our tax administration while ensuring that the current system works as it should, says Revenue Minister Judith Collins.

“The Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Bill contains proposals relating to collecting employment and investment income information.  The proposals will help Inland Revenue to ensure that people are on the right tax code and receiving any entitlements correctly.”

The Bill also contains proposals to modernise the taxation of employee share schemes.

Employee share schemes are arrangements where companies provide shares or share options to their employees as part of an employee’s remuneration.

Changes proposed in the Bill include new rules to ensure the tax treatment of employee share schemes is consistent with other forms of employment income. This includes providing a deduction for the employer for the cost of shares in line with other forms of remuneration.

“The employee share scheme measures proposed in the Bill are based on feedback from two rounds of public consultation in May and September 2016. The consultation process has been valuable in shaping the reforms contained in this Bill.

“For example, the original proposals raised the possibility of abolishing the tax regime for widely offered schemes, but in response to feedback the rules are being retained, but simplified and improved.

“There will also be another opportunity to provide feedback on the Bill during the Select Committee process.

“Through the consultation process, the Government also became aware of practical issues facing start-up companies offering employee share schemes.

“To address these issues, my officials are currently developing a public consultation document that refines the start-up proposal that was contained in the 2016 issues paper. I hope interested parties will provide feedback on these proposals too,” Ms Collins says.

Ms Collins says a range of measures addressing taxpayers’ concerns such as issues with demergers and decommissioning costs for petroleum miners are addressed by the Bill. There are also a number of GST-related matters included.

“And there is a proposal to add five new charities to the list of donee organisations eligible for tax benefits. These are, Byond Disaster Relief New Zealand, Flying for Life Charitable Trust, Médecins Sans Frontières New Zealand Charitable Trust, Tony McClean Nepal Trust, and Zimbabwe Rural Schools Library Trust,” Ms Collins says.

Revenue Minister Judith Collins and Tertiary Education, Skills and Employment Minister Paul Goldsmith say they are encouraged to see a marked increase in overseas student loan defaulters contacting Inland Revenue and taking steps to pay off their loans.

Since December 2014 there has been a 66% increase in the number of overseas borrowers who are behind on their payments getting in touch with Inland Revenue.

In the same period there has been a 32% increase in the number of defaulters who are now making a dent in their loan. Repayments by those who defaulted increased by $24.5 million for the year ended December 2016.

“Since the overseas-based borrower compliance initiative was established in 2010, borrowers have made an estimated $361 million in additional repayments, as of December 2016, with more than $100 million of that in the last financial year,” says Mr Goldsmith.

“We know that repayment times for overseas borrowers are much longer than for those residing in New Zealand, and that they account for more than 90 per cent of the roughly $1 billion that is in default. It is vital for overseas borrowers to make a plan with Inland Revenue to repay their loan.”

“Moving overseas is not a way to hide from your student loan obligations,” says Ms Collins.

“I’ve been pleased to see the recent data match arrangement with the Australian Tax Office proving successful. Inland Revenue has been provided with the contact details for almost 57,000 borrowers, which has already resulted in some large payments to Inland Revenue.”

Ms Collins says some borrowers have stumped up with significant lump sums after being contacted while many more have made arrangements to get back on track.

“I strongly advise any student loan borrower planning their OE to contact Inland Revenue before they leave. Sorting out a workable repayment plan in advance could save headaches later on.”

“The significant investment made by taxpayers in tertiary education and the student loan scheme means that around 82 per cent of the cost is shouldered by taxpayers, so it is important that borrowers make arrangements to repay their loans,” says Mr Goldsmith.

Energy and Resources Minister Judith Collins is leading a petroleum sector trade delegation to Texas and an electricity sector trade delegation to Silicon Valley next week.

Ms Collins will be accompanied by a petroleum sector delegation, which includes representatives from New Zealand Oil and Gas, Todd Energy and the Petroleum Exploration & Production Association of New Zealand, to Texas.   

In Texas, Ms Collins will be attending the American Association of Petroleum Geologists’ Annual Convention & Exhibition in Houston, as well as meeting with exploration and service companies to discuss investment opportunities in New Zealand.

Ms Collins will then lead an electricity sector delegation, which includes representatives from Mercury, Contact Energy, Vector, Power Systems Consultants and Genesis Energy, to California’s Silicon Valley.

“The electricity sector is going through a lot of change internationally and the trade mission to Silicon Valley will help New Zealand companies learn about the opportunities with emerging technologies, support New Zealand businesses looking to partner with US firms, and encourage electric vehicle manufacturers to enter the New Zealand market.”

The delegation to Silicon Valley is due to make calls on Tesla’s electric vehicle plant, Siemens, Volkswagen, energy technology company Enphase, Plugshare, SolarCity, Pacific Gas & Electric, Wrightspeed and Californian State energy regulators.

Ms Collins will be in the United States from 1 to 7 April.

 

 

Revenue Minister Judith Collins today welcomed Inland Revenue’s new webpage to help trustees of foreign trusts comply with the new disclosure rules.

“Foreign trusts now have to provide significantly more information than in the past. The webpage has all the information on the new rules and includes the forms which trusts need to complete in order to be registered by 30 June 2017.

“This information will help Inland Revenue get a much clearer picture about the beneficiaries of foreign trusts and their activities, as well as enable greater exchange of information with tax treaty partners.”

“Our new comprehensive foreign trust disclosure regime reinforces New Zealand’s international reputation.”

Trustees are encouraged to visit www.ird.govt.nz/international/exchange/foreign-trusts/ to download the forms and find more information.

 

A Bill  to improve and strengthen the tax rules passed its third reading today, Revenue Minister Judith Collins says.

“Building a more competitive and productive economy for New Zealanders is a priority for this Government.

“Making sure that the tax rules keep up with social and economic changes, as well as current business practices, is a vital part of a well-functioning economy.

“Improvements to the tax rules following enactment of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Bill will give taxpayers more certainty over their tax affairs by dealing with inefficiencies and complexities that have occurred over time. 

“That in turn, should result in lower compliance costs for business,” Ms Collins says.

Changes include:

simplifying the look-through company rules and the dividend rules as they apply to closely held companies, to ensure that the decision to convert a small business to a company is not driven by tax considerations; bolstering the rules around the tax treatment of interest earned in New Zealand by non-residents to ensure greater fairness; taxpayer-friendly changes to the GST rules, such as enabling businesses to deduct GST associated with the costs of raising capital; depreciation rollover relief for businesses in the upper South Island and Greater Wellington areas hit by last year’s earthquakes and aftershocks, and adding 14 new charities to the list of donee organisations in schedule 32 of the Income Tax Act 2007, making donors to those charities eligible for tax benefits on their donations.

The amount of electricity generated from renewables in New Zealand grew to 88 per cent in the three months to December 2016, building on increases seen in previous quarters, Energy and Resources Minister Judith Collins says.

“The result, released today in the latest New Zealand Energy Quarterly, shows the highest level of renewable electricity generation in 20 years. It demonstrates New Zealand is continuing to make the most of its ample renewable resources such as hydro.”

Ms Collins says the increase in renewable generation was party driven by high rainfall over the December 2016 quarter.

“There was a seven per cent growth in hydro generation compared to the previous December quarter, with many hydro catchment areas experiencing higher than average rainfall over the period.”

Continuing decreases in coal- and gas-fired generation also had an impact, Ms Collins says.

“The data shows that coal-fired generation declined by 64 per cent, and gas-fired generation by 21 per cent. This continued a longer-term trend that meant greenhouse gas emissions decreased by 35 per cent compared to the previous December quarter.”

The latest figures also show a fall in electricity consumption across all sectors, down three per cent compared to the same period last year.

“Most of this decrease is due to lower electricity consumption within the agriculture sector, with increased rainfall likely to have resulted in less demand for irrigation,” Ms Collins says.

The New Zealand Energy Quarterly is released by the Ministry of Business, Innovation and Employment (MBIE).

New Zealand Energy Quarterly:

http://www.mbie.govt.nz/info-services/sectors-industries/energy/energy-data-modelling/publications/new-zealand-energy-quarterly

Read about electricity cost and price monitoring:

http://www.mbie.govt.nz/info-services/sectors-industries/energy/energy-data-modelling/statistics/prices/electricity-prices

The amount of electricity generated from renewables in New Zealand grew to 88 per cent in the three months to December 2016, building on increases seen in previous quarters, Energy and Resources Minister Judith Collins says.

“The result, released today in the latest New Zealand Energy Quarterly, shows the highest level of renewable electricity generation in 20 years. It demonstrates New Zealand is continuing to make the most of its ample renewable resources such as hydro.”

Ms Collins says the increase in renewable generation was party driven by high rainfall over the December 2016 quarter.

“There was a seven per cent growth in hydro generation compared to the previous December quarter, with many hydro catchment areas experiencing higher than average rainfall over the period.”

Continuing decreases in coal- and gas-fired generation also had an impact, Ms Collins says.

“The data shows that coal-fired generation declined by 64 per cent, and gas-fired generation by 21 per cent. This continued a longer-term trend that meant greenhouse gas emissions decreased by 35 per cent compared to the previous December quarter.”

The latest figures also show a fall in electricity consumption across all sectors, down three per cent compared to the same period last year.

“Most of this decrease is due to lower electricity consumption within the agriculture sector, with increased rainfall likely to have resulted in less demand for irrigation,” Ms Collins says.

The New Zealand Energy Quarterly is released by the Ministry of Business, Innovation and Employment (MBIE).

New Zealand Energy Quarterly:

http://www.mbie.govt.nz/info-services/sectors-industries/energy/energy-data-modelling/publications/new-zealand-energy-quarterly

Read about electricity cost and price monitoring:

http://www.mbie.govt.nz/info-services/sectors-industries/energy/energy-data-modelling/statistics/prices/electricity-prices

New Zealand is well-placed to take advantage of the economic benefits of oil and gas exploration, Energy and Resources Minister Judith Collins announced today at the launch of the 2017 Block Offer petroleum tender.

“The global exploration and production industry is cyclical – the low number of permits granted in last year’s Block Offer reflects a significant downturn in the sector,” Ms Collins says.

“However, activity in New Zealand and globally is expected to pick up as operator margins improve. The Government will continue to ensure we reap the benefits of petroleum and mineral exploration while adhering to strong environmental and health and safety provisions.”

The annual Block Offer was first introduced in 2012 and provides an effective way for the Government to manage how petroleum permits are allocated.

This year’s Block Offer includes five offshore release areas (in Northland - Reinga, Pegasus - East Coast, Hawke Bay, Taranaki and Great South - Canterbury), and two onshore release areas (in Taranaki and Southland). There is also one offshore/onshore release area in Taranaki.

The total acreage included in the tender is 481,735 km², comprising 5,102 km² onshore and 476,632 km² offshore.

“New Zealand’s petroleum sector is small by global standards but is nonetheless a significant contributor to the economy. Between 2011 and 2015, oil companies invested $7.7 billion in oil and gas exploration and production in New Zealand. Other parts of the economy also benefit from the sector’s demand for goods and services.

“In order to encourage exploration activity, we need to maintain our reputation as open for investment and a good place to do business. At the same time, the Government’s regulatory framework will ensure New Zealand’s unique environment continues to be protected and its high standards of workplace health and safety are maintained.”

More information about Block Offer 2017 can be found on the New Zealand Petroleum & Minerals website https://www.nzpam.govt.nz/