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KPMG submission - “Making Tax Simpler: Better ...€¦ · Transformation project. ... Better...
24
© 2016 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Telephone +64 (4) 816 4500 Fax +64 (4) 816 4600 Internet www.kpmg.com/nz KPMG 10 Customhouse Quay P.O. Box 996 Wellington New Zealand KPMG is pleased to make a submission on the Government Discussion Document, Making Tax Simpler: Better Administration of PAYE and GST (the “Discussion Document”). We welcome the opportunity for continued engagement on Inland Revenue’s Business Transformation project. It is pleasing the Government recognises that a “big bang” approach to reform is not feasible. While the aim of a more efficient and responsive tax system is laudable, the changes to the administration of PAYE and GST should recognise the many different types and sizes of businesses as well as the potential compliance costs involved in the transition for taxpayers. These businesses should be given time to transition, rather than being compelled into the new rules from a specific date. We provide below our high level comments on the Discussion Document. Our responses to the specific questions raised in the Discussion Document are contained in the Appendix. Integrating tax requirements into businesses processes using software We are supportive of the Government’s initiative to integrate tax requirements into business processes using software, as such a change can be expected to reduce compliance costs for businesses in the long term. However, there will be short-term considerations that will impact uptake. We have three areas of concerns with the Government’s initiative. First, changes to business processes will involve short-term compliance costs for businesses. There are also inherent risks for businesses with basing PAYE on real-time payroll information transfers. Complying with the current PAYE rules is not straightforward. This will not substantially change with a move to an electronic information transfer model. For example, the calculation of PAYE and other deductions – e.g. ACC earner’s levy and KiwiSaver contributions – depends on the exact nature of the cash payment (e.g. redundancy payments vs Better Administration of PAYE and GST C/- Deputy Commissioner Policy and Strategy, Inland Revenue P O Box 2198 Wellington 6140 19 February 2016 Dear Sir KPMG submission - “Making Tax Simpler: Better Administration of PAYE and GST”
Transcript of KPMG submission - “Making Tax Simpler: Better ...€¦ · Transformation project. ... Better...
© 2016 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
Telephone +64 (4) 816 4500 Fax +64 (4) 816 4600 Internet www.kpmg.com/nz
KPMG 10 Customhouse Quay P.O. Box 996 Wellington New Zealand
KPMG is pleased to make a submission on the Government Discussion Document, Making Tax Simpler: Better Administration of PAYE and GST (the “Discussion Document”).
We welcome the opportunity for continued engagement on Inland Revenue’s Business Transformation project. It is pleasing the Government recognises that a “big bang” approach to reform is not feasible.
While the aim of a more efficient and responsive tax system is laudable, the changes to the administration of PAYE and GST should recognise the many different types and sizes of businesses as well as the potential compliance costs involved in the transition for taxpayers. These businesses should be given time to transition, rather than being compelled into the new rules from a specific date.
We provide below our high level comments on the Discussion Document. Our responses to the specific questions raised in the Discussion Document are contained in the Appendix.
Integrating tax requirements into businesses processes using software We are supportive of the Government’s initiative to integrate tax requirements into business processes using software, as such a change can be expected to reduce compliance costs for businesses in the long term. However, there will be short-term considerations that will impact uptake.
We have three areas of concerns with the Government’s initiative.
First, changes to business processes will involve short-term compliance costs for businesses. There are also inherent risks for businesses with basing PAYE on real-time payroll information transfers. Complying with the current PAYE rules is not straightforward. This will not substantially change with a move to an electronic information transfer model. For example, the calculation of PAYE and other deductions – e.g. ACC earner’s levy and KiwiSaver contributions – depends on the exact nature of the cash payment (e.g. redundancy payments vs
Better Administration of PAYE and GST C/- Deputy Commissioner Policy and Strategy, Inland Revenue P O Box 2198 Wellington 6140
19 February 2016
Dear Sir
KPMG submission - “Making Tax Simpler: Better Administration of PAYE and GST”
2
Policy and Strategy, Inland RevenueKPMG submission - “Making Tax Simpler: Better
Administration of PAYE and GST”19 February 2016
other extra pays). This requires a level of manual intervention and judgement by taxpayers. Employers can and will get these classifications wrong. Similar problems can arise with PAYE calculations when there is a fluctuation of income, such as those who earn commissions in addition to their salary and wages. For these reasons, we consider the Government should provide appropriate incentives, such as relaxing the penalties rules, for businesses to easily and more willingly adapt to change.
Secondly, we are concerned about situations where there are errors in the payroll information provided by an employer’s systems to Inland Revenue, or the system takes time to update for a change in an employee’s status. For example, payroll information may not contain the same information as an individual’s employment contract (particularly, if contracts change but the payroll is not simultaneously updated). Similarly, if an employee becomes a non-resident, their payroll information may not be updated to reflect this in a timely manner – i.e. they may continue to be treated as resident for PAYE purposes (and vice versa). When payroll information is updated to correct errors and changes in an employee’s residence status, employers should be able to “self-correct” this on a go forward basis (that is, in future pay periods) without any imposition of penalties. This flexibility is key as errors in payroll systems and processes will be inevitable. We believe that such error correction should not be limited to minor errors (i.e. constrained by a $ figure).
Finally, there should be an onus on Inland Revenue to respond to employers in a timely manner to allow them to update their payroll information. For example, when an employee undertakes an offshore assignment and subsequently becomes a non-resident, currently there can be a significant time lag until that employee receives a 0% special tax rate certificate from Inland Revenue, leading to an over-withholding of PAYE in the interim. These delays should not be acceptable in the “future state”. If employers are expected to update their systems and processes to interact with Inland Revenue in real-time, approval should be available in real-time.
Alternatively, employer/employee self-assessment of the employee’s status should be allowed. We note that in a real-time world Inland Revenue will have the ability to intervene more quickly. Further, employees typically prefer to receive a refund than pay more tax. This reduces the risk of rates which are too low being self-assessed.
PAYE – Modernising the PAYE rules We are supportive of proposals to modernise the existing PAYE rules, such as secondary tax, extra pay and holiday pay. On balance, we support greater simplicity over complexity, particular for smaller employers. However, a more accurate option (for calculating tax on extra pays) for employers who have more sophisticated payroll systems should be available. This recognises that there is no “one size fits all” solution. We also support legislative clarification of the treatment of holiday pay, rather than operational guidance from Inland Revenue.
PAYE – Modernising how information is provided We support the proposal to use an employer’s payroll software to advise Inland Revenue about changes in employment or employer status – e.g. becoming or ceasing to be an employer, or starting or ceasing employment.
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Policy and Strategy, Inland RevenueKPMG submission - “Making Tax Simpler: Better
Administration of PAYE and GST”19 February 2016
We believe that Inland Revenue should be able to receive information from an employer in order to validate or verify the identity of an employee. However, on balance, we do not believe that information collected by employers should include the employee’s date of birth (i.e. by legislating to allow employers to specifically collect date of birth information). We have concerns that this may leave some employees in a vulnerable position where their employment rights may be at risk.
We believe there are other types of information already available to employers that can be used to verify employees’ identities with Inland Revenue if there is uncertainty – for example, the physical address or other contact details of the employee, or use of other verification tools (such as RealMe). At a minimum, there should be a hierarchy whereby date of birth information is only collected if other identifiable information is not available or incomplete.
We consider transferring payroll information by using payroll software should reduce compliance costs for employers in the longer term. However, any changes to existing payroll systems are likely to involve time, effort and transitional costs for employers in the short-term. We would like to see this explicitly acknowledged, particularly as one of the proposals is to remove the current cash-flow benefit to employers from holding PAYE until payment is required (which we strongly disagree with – see below).
We are supportive of information sharing between Inland Revenue and other Government agencies as long as the recipient agency’s officers are subject to the same secrecy requirements as Inland Revenue officers. If information is taxpayer-sensitive, consent should be obtained prior to its release.
PAYE – Implementing change We recommend the voluntary-first approach rather than a legislated or review approach to implementing the PAYE changes. There will be a range of employers with different levels of capability that will need to be accommodated. Equally, PAYE technology solutions will need time to develop and gain buy-in. Therefore, we believe the review period should not be time constrained.
Employers, particularly smaller employers, need to be comfortable and understand the long term benefits of implementing change. The voluntary option, in our view, provides the best opportunity for creating the right incentives to encourage voluntary uptake by employers.
We note the proposed $50,000 threshold for the electronic PAYE proposal is much lower than the current $100,000 threshold for e-filing. This will capture a number of small employers who may not have the capability to file electronically. We believe a better proxy for payroll sophistication is the number of employees. We submit the proposal should apply to employers with annual PAYE of more than $100,000 and more than 3 employees.
PAYE – Aligning payments We see no need for the timing of PAYE payments to be aligned with when salary and wages are paid to employees. This proposal provides a cash flow benefit to the Government at a (potentially significant) working capital cost to businesses. This, when employers are also being
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Policy and Strategy, Inland RevenueKPMG submission - “Making Tax Simpler: Better
Administration of PAYE and GST”19 February 2016
asked to shoulder transitional costs from the proposals. This is likely to adversely impact on uptake, in our view, and is not supported.
Further, aligning payments would not allow sufficient time for any error correction, thereby exposing employers to potential penalties. This is on the basis that even if the PAYE information transfer is in real-time, there may be subsequent adjustments necessary, e.g. due to changes in employees’ status, meaning PAYE is under or overpaid. Therefore, if the proposal to align the payment of PAYE with when employees are paid proceeds, there needs to be certainty that PAYE payments cannot be re-assessed upwards, after the fact (and with the application of penalties).
GST – Modernising how information is provided We are generally supportive of the proposal to submit GST returns electronically and via reference to businesses’ accounting software. We agree that full automation of GST processes could result in issues with adjustments (e.g. correction of errors and unusual transactions) and, therefore, complete automation is not feasible. We also strongly agree that current GST payment timeframes should be retained. We do not believe that electronic filing should be mandated for payers above a certain threshold (we believe that electronic filing will increase as the relevant technology develops).
We support the proposal for GST refunds to only be made by direct credit unless it would cause undue hardship or is impracticable. However, this should not need to be a New Zealand bank account (which is a new requirement in order for a non-resident to obtain an IRD number and has imposed significant compliance costs and delays).
Access to information The Discussion Document is not clear what information will be sourced from business’ payroll and accounting systems. We have assumed that the references to “PAYE information” and “GST information” refers to information that Inland Revenue collects at present (and information needed to verify employees’ identifies, which will be used only for that purpose). We have taken the statement on page 15, that businesses would control how their software passes data to and from Inland Revenue and what is transferred as supporting this view.
We would have serious concerns if the proposals allowed Inland Revenue unfettered access to underlying employee and business data (particularly, given the exchange of information proposal in the Tax Administration Discussion Document). We believe this would not engender the required trust in the future system to encourage uptake and would be a backward step.
Accuracy, precision and timeliness Our detailed comments and our submission on the proposed Tax Administration Act changes highlight a tension between getting it right and speed.
Broadly, the Income Tax Act focuses on getting it right through the assessment process. That generally occurs after the fact and with the benefit of hindsight. A PAYE system that is focused on the commercial operation of a payroll will, in our view, never get it right.
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Policy and Strategy, Inland RevenueKPMG submission - “Making Tax Simpler: Better
Administration of PAYE and GST”19 February 2016
Achieving a real-time right tax therefore requires an acceptance that the taxable income is that produced by the payroll system. We see no evidence of that being accepted so that there remains a principle that the right tax liability is based on the Tax Act and not the payroll system.
We believe the right approach is to accept that PAYE is a means of collecting the ultimate tax liability. The tax assessment system is the place to correct the taxable income.
Provided that the PAYE is broadly in line with the ultimate tax liability, absolute precision and accuracy and therefore the need for retrospective corrections are unnecessary. This will provide employers with the required flexibility to operate a real-time PAYE system with some comfort that they will not be unduly penalised or that compliance will be unduly complicated.
Further information Please do not hesitate to contact us – John Cantin, on 04 816 4518, or Darshana Elwela, on 09 367 5940 – if you would like to discuss our submission in greater detail.
Yours sincerely
John Cantin Partner
Darshana Elwela National Tax Director
Tele
phon
e +
64 (4
) 816
450
0 Fa
x +
64 (4
) 816
460
0 In
tern
et
ww
w.k
pmg.
com
/nz
KP
MG
10
Cus
tom
hous
e Q
uay
P.O
. Box
996
W
ellin
gton
N
ew Z
eala
nd
App
endi
x –
KPM
G’s
det
aile
d re
spon
ses t
o th
e qu
estio
ns a
sked
Que
stio
ns
KPM
G c
omm
ent
3.1
Do
you
supp
ort t
he G
over
nmen
t’s v
ision
for
redu
cing
exi
sting
pre
ssur
e po
ints
arou
nd se
cond
ary
tax
thro
ugh
impr
oved
adm
inist
rativ
e in
terv
entio
n du
ring
the
year
, as a
resu
lt of
Inla
nd R
even
ue
rece
ivin
g m
ore
timel
y PA
YE
info
rmat
ion?
The
PAY
E pr
opos
al sh
ould
resu
lt in
a m
ore
accu
rate
am
ount
of
PAY
E be
ing
with
held
on
beha
lf of
taxp
ayer
s dur
ing
the
year
. Co
mm
unic
atio
n ar
ound
spec
ial t
ax c
odes
by
Inla
nd R
even
ue to
an
em
ploy
ee sh
ould
be
done
ele
ctro
nica
lly in
a ti
mel
y m
anne
r an
d th
e em
ploy
ee sh
ould
be
give
n an
opt
ion
to u
se th
e sp
ecia
l ta
x co
de b
ased
on
the
prio
r yea
r’s b
asic
tax
rate
(see
bel
ow).
3.2
Whi
le m
aint
aini
ng o
ur c
urre
nt in
com
e ta
x ra
te
struc
ture
, do
you
have
any
bet
ter s
ugge
stion
s for
re
duci
ng p
ress
ure
poin
ts ar
ound
seco
ndar
y ta
x by
im
prov
ing
the
accu
racy
of w
ithho
ldin
g ta
x at
sour
ce?
Taxp
ayer
s sho
uld
be g
iven
an
optio
n to
ele
ct a
spec
ial t
ax ra
te
base
d on
the
prio
r yea
r’s b
asic
tax
rate
. Whi
le th
is m
ay h
ave
a de
gree
of i
nacc
urac
y, e
.g. w
here
a p
erso
n’s i
ncom
e ch
ange
s ye
ar-o
n-ye
ar, i
n m
ost c
ases
we
belie
ve th
is w
ill p
rovi
de th
e be
st co
mpr
omise
bet
wee
n re
duci
ng c
ompl
exity
and
get
ting
it rig
ht.
3.3
Wha
t do
you
thin
k is
mor
e im
porta
nt –
mak
ing
the
met
hod
for c
alcu
latin
g ta
x on
ext
ra p
ays s
impl
er fo
r em
ploy
ers,
or m
akin
g th
e m
etho
d fo
r cal
cula
ting
tax
on e
xtra
pay
s mor
e ac
cura
te, t
o re
duce
insta
nces
of
too
muc
h ta
x be
ing
with
held
for e
mpl
oyee
s?
We
cons
ider
mak
ing
the
met
hod
simpl
er fo
r em
ploy
ers i
s mor
e im
porta
nt a
s the
deg
ree
of a
ccur
acy
shou
ld n
ot o
utw
eigh
the
asso
ciat
ed c
ompl
ianc
e co
st. O
ur v
iew
is p
artic
ular
ly in
form
ed b
y th
e m
akeu
p of
em
ploy
ers i
n N
ew Z
eala
nd, w
ith th
e m
ajor
ity
likel
y to
be
smal
l to
med
ium
bus
ines
s (i.e
. hav
ing
less
than
5-1
0 em
ploy
ees)
.
How
ever
, dep
endi
ng o
n th
e em
ploy
er’s
pay
roll
soph
istic
atio
n a
mor
e ac
cura
te m
etho
d fo
r cal
cula
ting
tax
on e
xtra
pay
s sho
uld
7
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16be
ava
ilabl
e. T
here
fore
, we
supp
ort o
ptio
nalit
y (w
ith th
e sim
pler
m
etho
d as
the
defa
ult).
Thi
s is d
iscus
sed
in m
ore
deta
il be
low
.
3.4
How
do
you
thin
k th
e am
ount
of t
ax to
be
dedu
cted
fro
m a
n ex
tra p
ay sh
ould
be
dete
rmin
ed?
Do
you
thin
k th
e cu
rrent
met
hod
is ac
cept
able
, or c
an y
ou
sugg
est a
bet
ter a
ltern
ativ
e?
We
cons
ider
the
curre
nt m
etho
d of
ded
uctin
g PA
YE
on e
xtra
pa
ys, b
ased
on
the
mar
gina
l tax
rate
cal
cula
ted
by a
nnua
lisin
g th
e pr
evio
us fo
ur w
eeks
’ pay
, is b
road
ly a
ppro
pria
te. T
his
calc
ulat
ion
rule
is re
lativ
ely
strai
ghtfo
rwar
d an
d em
ploy
ers w
ith
less
soph
istic
ated
syste
ms s
houl
d be
abl
e to
app
ly it
. In
term
s of
accu
racy
, the
re w
ill a
lway
s be
omis
sions
, not
leas
t bec
ause
an
empl
oyer
will
not
be
party
to a
ll in
form
atio
n re
latin
g to
thei
r em
ploy
ee. T
his i
s whe
re In
land
Rev
enue
’s B
usin
ess
Tran
sfor
mat
ion
proj
ect s
houl
d em
brac
e te
chno
logy
de
velo
pmen
ts to
bui
ld a
bet
ter p
ictu
re o
f tax
paye
rs’ i
ncom
e ea
rnin
g pr
ofile
s.
In th
e lo
ng te
rm, a
s tec
hnol
ogy
deve
lops
, we
expe
ct e
mpl
oyer
s w
ill b
e ab
le to
use
pay
roll
softw
are
that
can
cop
e w
ith a
mor
e co
mpl
ex e
xtra
pay
form
ula.
Suc
h pa
yrol
l sof
twar
e sh
ould
, ove
r tim
e, b
ecom
e ac
cess
ible
to sm
all b
usin
ess.
How
ever
, in
the
inte
rim, i
f a b
usin
ess h
as th
e pa
yrol
l sof
twar
e ca
pabi
lity
alre
ady
(i.e.
is ru
nnin
g a
com
plex
pay
roll)
, a m
ore
accu
rate
ext
ra p
ay
form
ula
shou
ld b
e ac
com
mod
ated
.
For t
his r
easo
n, w
e co
nsid
er th
e PA
YE
rule
s sho
uld
allo
w tw
o op
tions
for e
mpl
oyer
s – th
e cu
rrent
met
hod
and
the
mor
e co
mpl
ex b
ut a
ccur
ate
prop
osed
met
hod.
3.5
Wha
t do
you
thin
k ab
out t
he id
ea o
f int
rodu
cing
two
optio
ns –
a si
mpl
e m
etho
d or
a c
ompl
ex, b
ut m
ore
accu
rate
, met
hod
– th
at a
n em
ploy
er c
ould
use
to
dete
rmin
e th
e am
ount
of t
ax to
be
with
held
from
an
We
supp
ort t
he id
ea o
f tw
o op
tions
. Th
e sim
ple
met
hod
coul
d be
the
curre
nt m
etho
d of
cal
cula
ting
all P
AY
E in
com
e pa
ymen
ts m
ade
to th
e em
ploy
ee in
the
perio
d sta
rting
four
wee
ks b
efor
e th
e pa
ymen
t dat
e.
8
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16ex
tra p
ay?
If yo
u lik
e th
is id
ea, w
hat d
o yo
u th
ink
the
two
calc
ulat
ion
met
hods
shou
ld b
e?
The
mor
e co
mpl
ex b
ut a
ccur
ate
met
hod
coul
d be
mod
elle
d on
A
ustra
lia’s
com
plex
met
hod.
Thi
s is o
n th
e as
sum
ptio
n th
at th
e ap
prop
riate
rule
s and
trig
gers
can
be
desig
ned
and
embe
dded
in
payr
oll s
yste
ms (
such
that
sepa
rate
em
ploy
er in
terv
entio
n is
not
need
ed).
3.6
Are
you
unc
lear
abo
ut w
hen
holid
ay p
ay sh
ould
be
treat
ed a
s an
extra
pay
and
whe
n it
shou
ld b
e tre
ated
as
sala
ry o
r wag
es?
No.
How
ever
, if s
ubm
itter
s in
the
prev
ious
con
sulta
tion
roun
d ha
ve e
xpre
ssed
con
cern
s abo
ut th
e di
stinc
tion,
cla
rific
atio
n sh
ould
be
prov
ided
.
3.7
If yo
u th
ink
clar
ifyin
g th
e ta
x tre
atm
ent o
f hol
iday
pa
y is
desir
able
, do
you
thin
k it
shou
ld b
e cl
arifi
ed
by le
gisla
tion,
or d
o yo
u th
ink
clar
ifica
tion
in a
n In
land
Rev
enue
pub
licat
ion
wou
ld b
e su
ffici
ent?
We
belie
ve th
at a
ny c
larif
icat
ion
shou
ld b
e le
gisla
tive
in n
atur
e,
to p
rovi
de th
e ne
cess
ary
certa
inty
(rat
her t
han
oper
atio
nal
guid
ance
, whi
ch is
not
bin
ding
on
the
Com
miss
ione
r and
po
tent
ially
ope
n to
inte
rpre
tatio
n by
diff
eren
t Inl
and
Reve
nue
Offi
cers
).
3.8
Do
you
thin
k a
mec
hani
sm sh
ould
be
intro
duce
d fo
r w
ithho
ldin
g ad
ditio
nal a
mou
nts o
f tax
from
em
ploy
ees’
sala
ry o
r wag
es in
yea
rs w
hen
an e
xtra
pa
y da
y w
ill o
ccur
?
Yes
, if a
n ap
prop
riate
rule
cou
ld b
e de
velo
ped.
3.9
If yo
u th
ink
that
a m
echa
nism
shou
ld b
e in
trodu
ced,
w
hich
of t
he o
ptio
ns o
utlin
ed w
ould
you
pre
fer?
It
shou
ld b
e op
tiona
l for
em
ploy
ers w
hose
em
ploy
ees h
ave
spec
ifica
lly re
ques
ted
to w
ithho
ld a
dditi
onal
am
ount
s.
3.10
Do
you
thin
k th
at le
gisla
ted
rate
cha
nges
shou
ld b
e ap
plie
d in
the
sam
e w
ay a
cros
s PA
YE-
rela
ted
tax
type
s/pro
duct
s?
Yes
. We
supp
ort c
onsis
tenc
y in
the
treat
men
t of d
iffer
ent
amou
nts.
9
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16
3.11
Do
you
thin
k th
at a
pay
dat
e ap
proa
ch is
the
best
optio
n fo
r alig
nmen
t?
Yes
. On
the
expe
ctat
ion
that
tax
rate
cha
nges
are
unl
ikel
y to
be
frequ
ent,
and
will
gen
eral
ly a
pply
from
the
start
of a
tax
year
, th
e pa
y da
te a
ppro
ach
seem
s rea
sona
ble.
4.1
Feed
back
from
em
ploy
ers h
as id
entif
ied
the
follo
win
g co
ncer
ns w
ith th
e cu
rrent
PA
YE
info
rmat
ion
proc
ess:
• di
fficu
lties
in se
tting
up
new
staf
f;
• pr
oble
ms c
hang
ing
dedu
ctio
ns;
• di
fficu
lty in
mak
ing
chan
ges t
o in
form
atio
n al
read
y fil
ed;
• pr
oble
ms w
ith u
nder
stand
ing
and
reco
ncili
ng th
e in
form
atio
n In
land
Rev
enue
mak
es a
vaila
ble
to
empl
oyer
s; an
d
• co
ncer
ns a
bout
the
time
it ta
kes I
nlan
d Re
venu
e to
pro
cess
em
ploy
er m
onth
ly sc
hedu
les a
nd
actio
n am
endm
ents.
Are
thes
e th
e ke
y ar
eas o
f con
cern
with
the
PAY
E in
form
atio
n pr
oces
s fro
m a
n em
ploy
er’s
per
spec
tive?
Base
d on
our
disc
ussio
ns w
ith e
mpl
oyer
s, w
e be
lieve
thes
e ar
e an
acc
urat
e su
mm
atio
n of
the
key
conc
erns
with
the
curre
nt
PAY
E sy
stem
.
In o
ur v
iew
, the
cur
rent
infle
xibi
lity
of th
e PA
YE
syste
m, s
uch
as th
e ne
ed to
re-fi
le p
rior p
erio
d em
ploy
er m
onth
ly sc
hedu
les t
o co
rrect
erro
rs (a
nd th
e iss
ues t
here
in) n
eeds
to b
e ad
dres
sed
in
the
futu
re st
ate.
4.2
Are
ther
e ot
her a
spec
ts o
f the
pro
cess
of p
rovi
ding
PA
YE
info
rmat
ion
that
are
sign
ifica
nt so
urce
s of
frustr
atio
n/w
aste
d tim
e th
at sh
ould
be
rect
ified
?
Whe
re th
ere
are
erro
rs in
the
PAY
E in
form
atio
n, si
gnifi
cant
re
sour
ces c
an b
e sp
ent t
ryin
g to
cor
rect
thes
e er
rors
, at p
rese
nt.
An
abili
ty to
self-
corre
ct th
ese
erro
rs w
ould
incr
ease
effi
cien
cy
in th
e sy
stem
.
4.3
Do
curre
nt P
AY
E pr
oces
ses c
ause
oth
er p
robl
ems f
or
empl
oyee
s tha
t sho
uld
be a
ddre
ssed
? Th
e ca
lcul
atio
n of
PA
YE
and
othe
r ded
uctio
ns is
not
stra
ight
fo
rwar
d. I
n pa
rticu
lar,
the
ACC
ear
ner’s
levy
and
Kiw
iSav
er
10
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16
cont
ribut
ions
dep
end
on th
e ex
act n
atur
e of
the
cash
pay
men
t (e
.g. r
edun
danc
y pa
ymen
ts vs
oth
er e
xtra
pay
s). I
t can
be
easy
fo
r bus
ines
ses t
o ge
t the
se w
rong
(i.e
. the
re is
a h
uman
erro
r co
mpo
nent
in p
ayro
ll).
Also
, whe
n an
em
ploy
ee u
nder
take
s an
offs
hore
ass
ignm
ent a
nd
subs
eque
ntly
bec
omes
a n
on-re
siden
t, th
ere
can
be a
sign
ifica
nt
time
lag
until
that
em
ploy
ee re
ceiv
es a
0%
spec
ial t
ax ra
te
certi
ficat
e fro
m In
land
Rev
enue
, lea
ding
to a
n ov
er-w
ithho
ldin
g of
PA
YE.
The
ove
rpay
men
t of t
ax is
gen
eral
ly o
nly
corre
cted
at
the
end
of th
e ye
ar w
hen
the
pers
on’s
IR 3
retu
rn is
file
d.
It w
ould
be
help
ful f
or P
AY
E re
fund
s to
be re
ceiv
ed d
urin
g th
e ye
ar, w
hen
a pe
rson
’s st
atus
is u
pdat
ed in
thei
r em
ploy
er’s
pa
yrol
l sys
tem
, rat
her t
han
wai
ting
until
afte
r the
end
of t
he y
ear
for t
he p
erso
n to
squa
re u
p.
4.4
Do
you
supp
ort t
he p
ropo
sal t
hat e
mpl
oyer
s sho
uld
notif
y In
land
Rev
enue
of a
dec
ision
to c
omm
ence
, te
mpo
raril
y ce
ase
or p
erm
anen
tly c
ease
to b
e an
em
ploy
er?
Yes
, if t
his c
an b
e do
ne v
ia a
sim
ple
onlin
e pr
oces
s.
4.5
Shou
ld th
ese
requ
irem
ents
be in
clud
ed in
legi
slatio
n?
Yes
.
4.6
Do
you
agre
e w
ith th
e pr
opos
al th
at e
mpl
oyer
s sh
ould
be
able
to u
se th
eir p
ayro
ll so
ftwar
e to
pr
ovid
e re
leva
nt e
mpl
oyee
det
ails
to In
land
Rev
enue
at
the
time
thos
e de
tails
are
ent
ered
, cha
nged
, or
rem
oved
from
the
payr
oll s
yste
m?
Yes
. It i
s im
pera
tive
how
ever
that
onc
e em
ploy
ee d
etai
ls ar
e pr
ovid
ed v
ia th
e pa
yrol
l sys
tem
, Inl
and
Reve
nue
is pr
o-ac
tive
in
upda
ting
its re
cord
s and
resp
ondi
ng w
here
the
info
rmat
ion
may
be
inco
mpl
ete
or in
corre
ct (e
.g. I
RD n
umbe
rs a
nd ta
x co
des)
. Th
e cu
rrent
pro
cess
of p
rovi
ding
info
rmat
ion
to In
land
Rev
enue
an
d w
aitin
g fo
r a re
spon
se is
not
acc
epta
ble.
11
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16
4.7
Wou
ld u
sing
payr
oll s
oftw
are
to p
rovi
de In
land
Re
venu
e w
ith d
etai
ls of
new
em
ploy
ees b
efor
e th
ey
are
first
paid
and
bei
ng n
otifi
ed o
f ded
uctio
ns a
s set
ou
t abo
ve re
duce
or i
ncre
ase
com
plia
nce
costs
? If
you
can
quan
tify
the
effe
ct, p
leas
e do
so.
We
wou
ld e
xpec
t tha
t usin
g pa
yrol
l sof
twar
e to
aut
omat
ical
ly
notif
y In
land
Rev
enue
wou
ld re
duce
com
plia
nce
costs
. H
owev
er, a
ny b
enef
it w
ould
be
depe
nden
t on
how
pro
activ
e In
land
Rev
enue
is in
resp
onse
and
em
ploy
ers n
ot h
avin
g to
se
para
tely
not
ify th
e D
epar
tmen
t (as
is th
e ca
se p
rese
ntly
).
4.8
Do
you
supp
ort t
he p
ropo
sal t
hat I
nlan
d Re
venu
e sh
ould
con
tinue
to c
omm
unic
ate
any
chan
ge o
f em
ploy
ee o
blig
atio
ns o
r det
ails
to th
e em
ploy
ee?
Yes
. Ulti
mat
ely,
the
empl
oyee
is re
spon
sible
for t
heir
tax
posit
ion
and
so sh
ould
be
info
rmed
of a
ny c
hang
es to
thei
r ob
ligat
ions
.
4.9
Do
you
agre
e w
ith th
e pr
opos
al th
at e
mpl
oyer
s sh
ould
obt
ain
date
-of-b
irth
info
rmat
ion
and
prov
ide
this
info
rmat
ion
abou
t new
em
ploy
ees t
o In
land
Re
venu
e?
We
agre
e th
at e
mpl
oyer
s sho
uld
be a
ble
to o
btai
n in
form
atio
n ne
cess
ary
to v
alid
ate
an e
mpl
oyee
’s id
entit
y w
ith In
land
Re
venu
e. W
e do
not
agr
ee th
at th
is in
form
atio
n sh
ould
be
a ne
w
empl
oyee
’s d
ate-
of-b
irth
due
to c
once
rns a
bout
how
such
in
form
atio
n co
uld
be u
sed
adve
rsel
y in
an
empl
oym
ent c
onte
xt.
We
wou
ld e
xpec
t tha
t em
ploy
ers w
ould
alre
ady
have
oth
er
info
rmat
ion
that
can
be
used
for v
erifi
catio
n pu
rpos
es w
ith
Inla
nd R
even
ue, s
uch
as th
e em
ploy
ee’s
phy
sical
add
ress
or
othe
r con
tact
det
ails
(e.g
. the
ir te
leph
one
and
emai
l). D
ate-
of-
birth
shou
ld o
nly
be c
olle
cted
as a
last
reso
rt, if
no
othe
r id
entif
ying
info
rmat
ion
is av
aila
ble.
Mor
eove
r, w
e no
te th
at th
e G
over
nmen
t is e
ncou
ragi
ng th
e us
e of
tool
s lik
e Re
alM
e to
shar
e pe
rson
al in
form
atio
n sa
fely
and
se
cure
ly (i
nclu
ding
with
Gov
ernm
ent a
genc
ies,
such
as w
hen
rene
win
g a
pass
port)
. Thi
s pro
vide
s oth
er a
venu
es fo
r Inl
and
Reve
nue
to e
xplo
re to
con
firm
iden
tity
deta
ils.
12
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16
4.10
Shou
ld th
e re
quire
men
t on
the
empl
oyee
to p
rovi
de
date
-of-b
irth
info
rmat
ion
be in
clud
ed in
legi
slatio
n?
No.
Ref
er o
ur c
once
rns a
bove
with
the
colle
ctio
n of
dat
e-of
-birt
h as
an
iden
tifie
r.
4.11
If yo
ur p
ayro
ll so
ftwar
e co
uld
send
pay
roll
info
rmat
ion
to In
land
Rev
enue
at t
he ti
me
the
staff
are
paid
, wou
ld it
incr
ease
or r
educ
e yo
ur c
ompl
ianc
e co
sts?
If yo
u ca
n qu
antif
y th
e ef
fect
, ple
ase
do so
.
We
cons
ider
any
com
plia
nce
cost
savi
ng w
ill d
epen
d on
how
“f
inal
” th
e in
form
atio
n pr
ovid
ed b
y a
payr
oll s
yste
m w
ill b
e fo
r PA
YE
purp
oses
.
Ther
e se
ems t
o be
an
unde
rlyin
g as
sum
ptio
n th
at re
al-ti
me
PAY
E in
form
atio
n tra
nsfe
rs w
ill b
e 10
0% a
ccur
ate.
In th
e re
al
wor
ld, t
his w
ill n
ot b
e th
e ca
se. C
hang
es in
em
ploy
ees’
stat
us
(and
how
long
it ta
kes t
o co
nfirm
this)
, om
issio
ns a
nd g
ener
al
hum
an e
rror w
ill m
ean
that
cor
rect
ive
actio
n w
ill b
e ne
eded
to
payr
olls.
The
que
stion
is h
ow su
ch re
med
ial a
ctio
n w
ill b
e ex
pect
ed to
be
refle
cted
in th
e PA
YE
“fut
ure
state
” –
whe
ther
th
is ca
n sim
ply
be ro
lled
forw
ard
to fu
ture
pay
per
iods
(our
pr
efer
red
optio
n –
see
belo
w) o
r whe
ther
prio
r per
iod
info
rmat
ion
will
nee
d to
be
re-c
alcu
late
d an
d sta
ted
(whi
ch is
the
situa
tion
now
and
the
sour
ce o
f cur
rent
frus
tratio
n fo
r em
ploy
ers)
. Also
, the
app
licat
ion
of th
e pe
nalti
es re
gim
e in
thes
e sit
uatio
ns n
eeds
to b
e co
nsid
ered
.
The
Disc
ussi
on D
ocum
ent r
efer
s to
an e
mpl
oyer
’s p
ayro
ll sy
stem
. In
prac
tice,
an
empl
oyer
may
run
diffe
rent
pay
roll
syste
ms f
or d
iffer
ent b
usin
ess u
nits
(in th
e ca
se o
f lar
ge
corp
orat
e gr
oups
) or f
or d
iffer
ent t
ypes
of e
mpl
oyee
s (e.
g. se
nior
m
anag
emen
t ver
sus g
ener
al e
mpl
oyee
s). T
here
fore
, the
futu
re
state
nee
ds to
take
into
acc
ount
that
an
empl
oyer
may
hav
e m
ultip
le p
ayro
ll sy
stem
s tha
t Inl
and
Reve
nue’
s IT
syste
m w
ill
need
to c
omm
unic
ate
with
.
Also
, it i
s com
mon
for e
mpl
oyer
s to
oper
ate
“sha
dow
pay
roll”
sy
stem
s, e.
g. fo
r em
ploy
ees w
ho m
ay b
e on
ass
ignm
ent.
Ofte
n
13
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16th
e sh
adow
pay
roll
will
be
for a
dmin
istra
tive
conv
enie
nce
rath
er
than
bei
ng u
sed
to c
alcu
late
a P
AY
E lia
bilit
y. In
land
Rev
enue
’s
syste
ms w
ill n
eed
to b
e sm
art e
noug
h to
mak
e th
ese
disti
nctio
ns,
and
not t
rigge
r erro
rs a
nd e
nfor
cem
ent a
ctio
n (o
r pen
altie
s).
4.12
If pa
yrol
l sof
twar
e co
uld
calc
ulat
e th
e in
form
atio
n re
quire
d to
am
end
payr
oll r
ecor
ds a
nd c
ould
be
used
to
send
that
info
rmat
ion
to In
land
Rev
enue
at t
he
time
payr
oll r
ecor
ds a
re a
men
ded,
wou
ld th
at
incr
ease
or r
educ
e yo
ur c
ompl
ianc
e co
sts?
If yo
u ca
n qu
antif
y th
e ef
fect
, ple
ase
do so
.
Our
stro
ng p
refe
renc
e is
for e
rror c
orre
ctio
n to
be
auto
mat
ical
ly
embe
dded
in a
men
dmen
ts to
futu
re p
ayro
ll (i.
e. a
self-
corre
ctio
n m
echa
nism
), ra
ther
than
requ
iring
re-s
tate
men
t of P
AY
E in
form
atio
n al
read
y el
ectro
nica
lly fi
led.
4.13
Do
you
pref
er o
ne o
r oth
er o
f the
two
optio
ns
outli
ned
abov
e fo
r the
info
rmat
ion
to b
e pr
ovid
ed
whe
n PA
YE
info
rmat
ion
is am
ende
d?
See
abov
e. If
our
subm
issio
n ab
ove
is no
t acc
epte
d, w
e pr
efer
th
e op
tion
of a
dvisi
ng th
e ch
ange
requ
ired
to in
com
e an
d de
duct
ions
for e
ach
pay
perio
d in
whi
ch th
e er
ror o
ccur
red.
4.14
Do
you
thin
k th
ere
is a
need
for l
egisl
atio
n to
ex
plic
itly
prov
ide
for t
he c
orre
ctio
n of
min
or e
rrors
in
a su
bseq
uent
pay
per
iod?
If so
, at w
hat $
val
ue
shou
ld th
e th
resh
old
be se
t?
We
cons
ider
legi
slatio
n sh
ould
pro
vide
an
abili
ty fo
r em
ploy
ers
to c
orre
ct e
rrors
in fu
ture
pay
per
iods
via
self-
asse
ssm
ent.
This
shou
ld n
ot b
e lim
ited
to “
min
or e
rrors
” (h
owev
er, t
his i
s de
fined
) as t
he e
ntire
pre
mis
e of
the
elec
troni
c PA
YE
prop
osal
is
that
PA
YE
shou
ld fo
llow
em
ploy
ers’
nor
mal
pay
roll
proc
esse
s.
Ther
efor
e, if
an
empl
oyer
mak
es a
n er
ror a
nd sq
uare
s thi
s up
in
the
follo
win
g pe
riod’
s pay
(or i
n th
e pa
y fo
r a fu
ture
per
iod)
, thi
s ad
just
men
t sho
uld
also
be
refle
cted
for P
AY
E pu
rpos
es in
that
fu
ture
pay
per
iod
(with
out r
e-sta
ting
info
rmat
ion
alre
ady
filed
, an
d tri
gger
ing
a hi
storic
PA
YE
liabi
lity)
. The
pen
altie
s reg
ime
shou
ld o
nly
be u
sed
if an
em
ploy
er h
as d
elib
erat
ely
unde
r-de
clar
ed sa
lary
and
wag
es to
avo
id a
PA
YE
liabi
lity.
In p
ract
ice,
w
e be
lieve
ther
e w
ill b
e ap
prop
riate
com
mer
cial
tens
ions
to
ensu
re th
at e
mpl
oyee
s are
not
del
iber
atel
y un
derp
aid.
14
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16Fo
r exa
mpl
e, w
e co
nsid
er e
mpl
oyer
s sho
uld
be a
ble
to c
orre
ct
over
paym
ents
of P
AY
E if
an e
mpl
oyee
bec
omes
a n
on-re
siden
t fo
r tax
pur
pose
s and
the
payr
oll s
yste
m is
not
upd
ated
in ti
me.
W
here
em
ploy
ers h
ave
over
-ded
ucte
d PA
YE
in su
ch si
tuat
ions
, th
e pa
yrol
l sys
tem
may
be
able
to b
e ad
juste
d to
“re
cove
r” th
e ov
erpa
ymen
ts vi
a in
stalm
ents
or a
lum
p su
m p
aym
ents
to th
e em
ploy
ee. H
owev
er, f
or ta
x pu
rpos
es, o
verp
aym
ents
are
not a
ble
to b
e re
cove
red
from
Inla
nd R
even
ue u
ntil
that
indi
vidu
al
com
plet
es th
eir I
R 3.
We
cons
ider
thes
e ty
pes o
f erro
rs sh
ould
al
so b
e ab
le to
be
self-
corre
cted
in su
bseq
uent
tax
perio
ds w
hen
they
are
cor
rect
ed v
ia p
ayro
ll.
Our
pre
fere
nce
is fo
r a se
lf-co
rrect
ion
regi
me
for e
mpl
oyer
s, ra
ther
than
a p
rovi
sion
like
exist
ing
sect
ion
113A
of t
he T
ax
Adm
inist
ratio
n A
ct 1
994,
whi
ch re
quire
s Inl
and
Reve
nue’
s ap
prov
al.
4.15
Wou
ld th
e fo
llow
ing
attri
bute
s of t
he p
ropo
sed
new
PA
YE
proc
esse
s be
of v
alue
? If
you
can
quan
tify
the
effe
ct, p
leas
e do
so.
• fa
ster p
roce
ssin
g of
PA
YE
info
rmat
ion
by In
land
Re
venu
e;
• gr
eate
r acc
ess t
o yo
ur P
AY
E in
form
atio
n;
• th
e ab
ility
to fi
lter a
nd d
rill i
nto
your
PA
YE
info
rmat
ion;
and
• th
e ab
ility
, if n
eces
sary
, for
you
and
an
Inla
nd
Reve
nue
staff
mem
ber t
o se
e th
e sa
me
info
rmat
ion.
We
cons
ider
all
of th
e at
tribu
tes o
f the
pro
pose
d ne
w P
AY
E pr
oces
ses t
o be
of v
alue
.
15
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16
4.16
Do
you
prov
ide
info
rmat
ion
to o
ther
gov
ernm
ent
agen
cies
that
you
thin
k w
ould
mor
e ap
prop
riate
ly b
e pr
ovid
ed to
and
pas
sed
on b
y In
land
Rev
enue
as p
art
of th
e PA
YE
info
rmat
ion
proc
ess?
Ther
e is
valu
e in
redu
cing
dup
licat
ion
of in
form
atio
n re
ques
ts.
We
are
supp
ortiv
e of
info
rmat
ion
shar
ing
by In
land
Rev
enue
w
ith o
ther
Gov
ernm
ent a
genc
ies p
rovi
ded
the
reci
pien
t age
ncy’
s of
ficer
s are
subj
ect t
o th
e sa
me
secr
ecy
requ
irem
ents
as In
land
Re
venu
e of
ficer
s. If
the
info
rmat
ion
is ta
xpay
er-s
ensit
ive,
co
nsen
t sho
uld
be o
btai
ned
from
the
taxp
ayer
prio
r to
info
rmat
ion
shar
ing.
5.1
Prov
ided
a st
raig
htfo
rwar
d in
tern
et p
orta
l exi
sts, d
o yo
u ag
ree
that
em
ploy
ers w
ith m
ore
than
$50
,000
a
year
of P
AY
E an
d ES
CT o
blig
atio
ns sh
ould
be
requ
ired
to fi
le P
AY
E in
form
atio
n el
ectro
nica
lly?
The
$50,
000
thre
shol
d is
muc
h lo
wer
than
the
curre
nt $
100,
000
e-fil
ing
thre
shol
d an
d is
not s
uppo
rted.
Our
con
cern
is th
at th
is w
ill c
aptu
re v
ery
smal
l em
ploy
ers a
nd im
pose
cos
ts on
them
to
upgr
ade.
Thi
s will
be
a “c
liff”
, fro
m a
com
plia
nce
cost
pers
pect
ive,
for a
n em
ploy
er w
ho h
as P
AY
E ob
ligat
ions
of
$50,
001.
Our
sugg
estio
n is
for t
he th
resh
old
to b
e ba
sed
on a
com
bina
tion
of th
e cu
rrent
$10
0,00
0 PA
YE
thre
shol
d an
d th
e nu
mbe
r of
empl
oyee
s (se
e be
low
).
It is
also
impo
rtant
that
em
ploy
ers a
re g
iven
suffi
cien
t tra
inin
g on
thei
r PA
YE
oblig
atio
ns u
nder
the
new
rule
s. Th
e pr
ovisi
on o
f so
ftwar
e al
one
may
not
be
suffi
cien
t, fo
r sm
alle
r em
ploy
ers
parti
cula
rly.
5.2
If yo
u be
lieve
the
thre
shol
d fo
r ele
ctro
nic
filin
g sh
ould
be
base
d on
som
ethi
ng o
ther
than
the
valu
e of
PA
YE
and
ESCT
ded
uctio
ns, p
leas
e de
scrib
e ho
w
the
alte
rnat
ive
wou
ld w
ork
and
whe
re y
ou th
ink
the
thre
shol
d sh
ould
be?
We
belie
ve th
at th
e nu
mbe
r of e
mpl
oyee
s is a
bet
ter p
roxy
for
the
elec
troni
c fil
ing
requ
irem
ent,
as a
PA
YE
base
d th
resh
old
can
be a
rbitr
ary
(e.g
. the
PA
YE
thre
shol
d co
uld
be m
et q
uite
eas
ily
for a
1 e
mpl
oyee
bus
ines
s, de
pend
ing
on th
e em
ploy
ee’s
sala
ry).
We
ther
efor
e be
lieve
that
the
elec
troni
c fil
ing
optio
n sh
ould
not
ap
ply
to b
usin
esse
s with
PA
YE
of $
100,
000
or le
ss o
r 3 o
r few
er
empl
oyee
s.
16
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16
5.3
Are
ther
e fa
ctor
s, ot
her t
han
inab
ility
to a
cces
s dig
ital
serv
ices
, whi
ch sh
ould
be
grou
nds f
or a
n ex
empt
ion
from
a re
quire
men
t to
file
PAY
E in
form
atio
n el
ectro
nica
lly?
An
exem
ptio
n sh
ould
be
avai
labl
e if
an e
mpl
oyer
is a
ble
to
dem
onstr
ate
that
thei
r pay
roll
syste
m is
not
suffi
cien
tly
soph
istic
ated
to fi
le p
ayro
ll in
form
atio
n el
ectro
nica
lly. T
his w
ill
not n
eces
saril
y be
lim
ited
to si
tuat
ions
whe
re th
ere
is la
ck o
f di
gita
l acc
ess (
such
as a
n in
tern
et c
onne
ctio
n or
softw
are)
. For
ex
ampl
e, a
smal
l bus
ines
s ow
ner m
ay si
mpl
y no
t hav
e th
e re
sour
ces,
and
shor
t of f
orci
ng th
em to
out
sour
ce th
eir p
ayro
ll, a
t co
st, th
e el
ectro
nic
filin
g op
tion
may
not
be
feas
ible
. The
so
phist
icat
ion
of th
e bu
sines
s nee
ds to
be
take
n in
to a
ccou
nt.
5.4
How
shou
ld “
inab
ility
to a
cces
s dig
ital s
ervi
ces”
be
defin
ed fo
r the
pur
pose
s of a
n ex
empt
ion
to a
re
quire
men
t to
file
PAY
E in
form
atio
n el
ectro
nica
lly?
See
our c
omm
ents
abov
e. T
here
shou
ld b
e a
disc
retio
n av
aila
ble
to th
e Co
mm
issio
ner t
o co
ver t
he v
ario
us c
ircum
stanc
es.
5.5
Do
you
thin
k th
ere
shou
ld b
e a
mor
e fle
xibl
e fra
mew
ork
unde
r whi
ch c
hang
es to
the
thre
shol
d fo
r el
ectro
nic
filin
g ar
e co
nsid
ered
in th
e fu
ture
?
Yes
.
5.6
If yo
u th
ink
so, w
hich
of t
he o
ptio
ns o
utlin
ed a
bove
do
you
pre
fer?
W
e pr
efer
an
Ord
er in
Cou
ncil
(i.e.
Reg
ulat
ion
type
app
roac
h) to
ch
ange
thre
shol
ds a
s thi
s pro
vide
s gre
ater
flex
ibili
ty th
an a
le
gisla
tive
rule
.
5.7
Do
you
agre
e th
at G
over
nmen
t nee
ds to
be
able
to
bala
nce
the
empl
oyer
’s in
tere
st in
cho
osin
g ho
w to
pr
ovid
e PA
YE
info
rmat
ion
agai
nst t
he w
ider
syste
m
bene
fits?
We
cons
ider
the
Disc
ussio
n D
ocum
ent a
lread
y em
phas
ises t
he
wid
er sy
stem
s ben
efits
. How
ever
, it p
oten
tially
und
eres
timat
es
the
trans
ition
al c
osts
on e
mpl
oyer
s and
pot
entia
l los
s of w
orki
ng
cash
flow
if P
AY
E pa
ymen
ts ar
e al
igne
d w
ith th
e pr
ovisi
on o
f PA
YE
info
rmat
ion.
17
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16
5.8
Do
you
thin
k G
over
nmen
t sho
uld
requ
ire e
mpl
oyer
s to
use
pay
roll
softw
are
capa
ble
of p
rovi
ding
PA
YE
info
rmat
ion
at th
e tim
e of
the
busin
ess p
roce
ss?
This
shou
ld b
e op
tiona
l for
em
ploy
ers.
Also
, the
Gov
ernm
ent
shou
ld c
reat
e ap
prop
riate
ince
ntiv
es (e
.g. b
y re
laxi
ng th
e pe
nalti
es re
gim
e an
d/or
con
tribu
ting
to th
e co
st of
esta
blish
ing
an e
lect
roni
c so
lutio
n) to
enc
oura
ge e
mpl
oyer
s to
take
up
this
optio
n.
5.9
If yo
u pr
efer
one
or o
ther
of t
he o
utlin
ed
impl
emen
tatio
n ap
proa
ches
to th
e pr
ovisi
on o
f PA
YE
info
rmat
ion
at th
e tim
e of
the
busin
ess p
roce
ss
(vol
unta
ry-fi
rst r
evie
w o
r leg
islat
ed) p
leas
e id
entif
y yo
ur p
refe
rred
optio
n.
We
reco
mm
end
the
volu
ntar
y-fir
st ap
proa
ch ra
ther
than
a
legi
slate
d or
revi
ew a
ppro
ach
to im
plem
entin
g th
e PA
YE
chan
ges.
Ther
e w
ill b
e a
rang
e of
em
ploy
ers w
ith d
iffer
ent l
evel
s of
cap
abili
ty th
at w
ill n
eed
to b
e ac
com
mod
ated
. Equ
ally
, PA
YE
tech
nolo
gy so
lutio
ns w
ill n
eed
time
to d
evel
op a
nd g
ain
buy-
in.
Ther
efor
e, w
e do
not
bel
ieve
the
revi
ew p
erio
d sh
ould
be
time
cons
train
ed.
Empl
oyer
s, pa
rticu
larly
smal
ler e
mpl
oyer
s, ne
ed to
be
com
forta
ble
and
unde
rsta
nd th
e lo
ng te
rm b
enef
its o
f im
plem
entin
g ch
ange
. The
vol
unta
ry o
ptio
n, in
our
vie
w,
prov
ides
the
best
oppo
rtuni
ty fo
r cre
atin
g th
e rig
ht in
cent
ives
to
enco
urag
e vo
lunt
ary
upta
ke b
y em
ploy
ers.
5.10
If yo
u w
ould
pre
fer a
noth
er a
ppro
ach
entir
ely,
ple
ase
outli
ne it
. N
/A.
5.11
If yo
u su
ppor
t the
“re
view
app
roac
h”, h
ow lo
ng a
fter
it fir
st be
com
es p
ossib
le to
mee
t PA
YE
oblig
atio
ns
by su
bmitt
ing
PAY
E in
form
atio
n at
the
time
of th
e bu
sines
s pro
cess
shou
ld th
e re
view
occ
ur?
N/A
.
5.12
If yo
ur a
nsw
er to
any
of t
he a
bove
que
stion
s wou
ld
vary
dep
endi
ng o
n an
em
ploy
er’s
size
or o
ther
Th
e fo
llow
ing
fact
ors (
whi
ch a
re n
on-e
xhau
stive
) cou
ld im
pact
on
the
answ
ers t
o th
e ab
ove
ques
tions
:
18
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16ch
arac
teris
tics,
plea
se o
utlin
e th
e co
nsid
erat
ions
you
th
ink
are
rele
vant
.
• N
umbe
r of e
mpl
oyee
s
• Si
ze a
nd n
atur
e of
the
busin
ess
• N
umbe
r of m
obile
em
ploy
ees (
e.g.
inbo
und/
outb
ound
as
signe
es)
• Co
mpl
exity
of t
he p
ayro
ll sy
stem
(e.g
. if m
ultip
le/sh
adow
pa
yrol
l sys
tem
s are
ope
rate
d)
• Fr
eque
ncy
of p
aym
ents
othe
r tha
n sa
lary
and
wag
es
5.13
If yo
u w
ere
requ
ired
to p
rovi
de P
AY
E in
form
atio
n at
th
e tim
e th
e bu
sines
s pro
cess
occ
urs,
wou
ld y
ou se
ek
to c
hang
e th
e fre
quen
cy w
ith w
hich
you
pai
d yo
ur
staff?
Our
wor
king
ass
umpt
ion
is th
at, i
n th
e sh
ort-t
erm
at l
east,
it
wou
ld b
e di
fficu
lt be
caus
e ch
angi
ng th
e fre
quen
cy o
f pay
pe
riods
will
requ
ire c
hang
es to
em
ploy
ees’
con
tract
s and
/or
inte
rnal
syste
m a
nd p
roce
ss c
hang
es.
5.14
If yo
u ha
ve a
larg
e pa
yrol
l, w
hat f
acto
rs w
ould
in
fluen
ce w
heth
er y
ou w
ould
upg
rade
it to
take
ad
vant
age
of th
e ne
w P
AY
E se
rvic
es?
We
wou
ld e
xpec
t em
ploy
ers t
o be
war
y of
the
trans
ition
al c
osts
(bot
h m
onet
ary
and
time
as w
ell a
s pot
entia
l disr
uptio
n to
thei
r “b
usin
ess a
s usu
al”)
to im
plem
ent.
5.15
Doe
s an
upgr
ade
to y
our p
ayro
ll sy
stem
to p
rovi
de
PAY
E in
form
atio
n at
the
time
of th
e bu
sines
s pro
cess
de
pend
on
the
law
bei
ng c
hang
ed to
mak
e th
is a
lega
l re
quire
men
t?
Ther
e ar
e lik
ely
to b
e a
rang
e of
reas
ons f
or b
usin
esse
s up
grad
ing
payr
oll s
yste
ms,
incl
udin
g re
gula
tory
com
pulsi
on.
5.16
Do
you
thin
k th
at fi
nanc
ial a
ssist
ance
, suc
h as
the
exist
ing
payr
oll s
ubsid
y or
som
ethi
ng e
lse, s
houl
d be
av
aila
ble
to a
ssist
em
ploy
ers t
o ta
ke a
dvan
tage
of t
he
new
dig
ital s
ervi
ces p
ropo
sed
to m
oder
nise
PA
YE
info
rmat
ion?
We
belie
ve fi
nanc
ial a
ssist
ance
may
be
requ
ired
to c
ompe
nsat
e fo
r the
tran
sitio
nal c
ost a
s wel
l as o
ngoi
ng c
osts
(the
latte
r pa
rticu
larly
if e
mpl
oyer
s are
to lo
se th
e ca
sh-fl
ow b
enef
it fro
m
hold
ing
PAY
E as
wor
king
cap
ital p
rior t
o re
mitt
ance
).
19
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16
5.17
If so
, wha
t fac
tors
shou
ld a
ny su
ch a
ssist
ance
targ
et?
Ass
istan
ce c
ould
be
targ
eted
by
size
of b
usin
ess,
with
smal
ler
empl
oyer
s mor
e lik
ely
to b
e di
spro
porti
onat
ely
impa
cted
by
the
chan
ges (
see
also
abo
ve o
ur su
gges
tion
to li
mit
the
PAY
E pr
opos
als t
o em
ploy
ers w
ith m
ore
than
3 e
mpl
oyee
s).
5.18
If yo
u ru
n a
smal
l or m
ediu
m p
ayro
ll, w
hat f
acto
rs
wou
ld b
e m
ost i
nflu
entia
l in
dete
rmin
ing
whe
ther
yo
u w
ould
cho
ose
to u
pgra
de to
softw
are
offe
ring
the
new
PA
YE
serv
ices
?
We
wou
ld e
xpec
t the
shor
t-ter
m c
ost v
s lon
g-te
rm b
enef
it tra
de-
off t
o be
an
impo
rtant
con
sider
atio
n fo
r bus
ines
s.
5.19
If yo
u ru
n a
smal
l or m
ediu
m p
ayro
ll an
d w
ere
requ
ired
to p
rovi
de P
AY
E in
form
atio
n at
the
time
of
the
busin
ess p
roce
ss, w
hat o
ptio
ns w
ould
you
co
nsid
er a
nd w
hy?
We
wou
ld e
xpec
t sim
plic
ity to
be
an im
porta
nt c
onsid
erat
ion
– i.e
. how
sim
ple
will
the
softw
are
be to
use
(par
ticul
arly
if th
e bu
sines
s has
pre
viou
sly n
ot u
sed
elec
troni
c pa
yrol
l sof
twar
e)?
5.20
Are
ther
e ad
ditio
nal i
ssue
s bey
ond
thos
e id
entif
ied
for s
mal
l and
med
ium
org
anisa
tions
, and
thos
e w
ith
very
sim
ple
payr
olls,
that
nee
d to
be
cons
ider
ed w
hen
thin
king
abo
ut h
ow th
e pr
opos
ed n
ew P
AY
E se
rvic
es
wou
ld w
ork
for n
ot-fo
r-pro
fit o
rgan
isatio
ns?
No
com
men
t.
5.21
Are
ther
e ad
ditio
nal i
ssue
s tha
t nee
d to
be
cons
ider
ed
whe
n th
inki
ng a
bout
how
the
prop
osed
new
PA
YE
serv
ices
wou
ld w
ork
for t
hird
par
ties s
uch
as
book
keep
ers,
acco
unta
nts,
payr
oll b
urea
us a
nd
payr
oll i
nter
med
iarie
s?
If PA
YE
info
rmat
ion
is to
be
trans
ferre
d to
Inla
nd R
even
ue in
re
al-ti
me,
taxp
ayer
s and
thei
r int
erm
edia
ries a
nd ta
x ag
ents
shou
ld b
e ab
le to
hav
e ac
cess
to th
e in
form
atio
n in
real
-tim
e.
This
is a
key
“bug
bear
” w
ith th
e cu
rrent
syste
m, w
hich
take
s tim
e to
upd
ate.
A si
mpl
e us
er in
terfa
ce w
ould
also
ass
ist.
Furth
er, i
f our
pro
posa
l to
was
h up
PA
YE
erro
rs in
futu
re
perio
ds is
not
acc
epte
d, th
ere
need
s to
be th
e fa
cilit
y to
cor
rect
an
y er
rors
in p
revi
ous p
ay p
erio
ds e
lect
roni
cally
.
20
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16
5.22
If th
ere
is a
gene
ral r
equi
rem
ent t
o pr
ovid
e PA
YE
info
rmat
ion
whe
n th
e bu
sines
s pro
cess
occ
urs,
is it
reas
onab
le to
exp
ect e
mpl
oyer
s who
hav
e an
ex
empt
ion,
bec
ause
they
can
not u
se d
igita
l ser
vice
s, to
non
ethe
less
pro
vide
disa
ggre
gate
d PA
YE
(pay
da
y) in
form
atio
n?
It is
not c
lear
to u
s how
this
wou
ld d
iffer
from
cur
rent
re
quire
men
ts to
pro
vide
(disa
ggre
gate
d?) P
AY
E in
form
atio
n un
der t
he e
mpl
oyer
mon
thly
sche
dule
?
How
ever
, we
do n
ot su
ppor
t the
se e
mpl
oyer
s hav
ing
to p
rovi
de
PAY
E in
form
atio
n in
real
-tim
e (o
r at l
east
mor
e fre
quen
tly th
an
they
cur
rent
ly d
o). T
he e
lect
roni
c PA
YE
prop
osal
is fa
cilit
ated
by
the
empl
oyer
not
phy
sical
ly h
avin
g to
eng
age
in th
e pr
oces
s –
i.e. t
he in
form
atio
n tra
nsfe
r will
hap
pen
auto
mat
ical
ly. T
his w
ill
not b
e th
e ca
se if
the
empl
oyer
has
a m
anua
l sys
tem
.
5.23
If th
ere
is a
gene
ral r
equi
rem
ent t
o pr
ovid
e PA
YE
info
rmat
ion
at th
e tim
e th
e bu
sines
s pro
cess
occ
urs,
is it
reas
onab
le to
exp
ect t
hat e
xem
pt e
mpl
oyer
s sh
ould
be
requ
ired
to p
rovi
de P
AY
E in
form
atio
n by
th
e 5t
h of
the
follo
win
g m
onth
?
See
abov
e. W
e se
e no
reas
on fo
r red
ucin
g th
e tim
e av
aila
ble
for
non-
elec
troni
c fil
ers t
o pr
ovid
e PA
YE
info
rmat
ion
from
the
20th
of
the
follo
win
g m
onth
to th
e 5th
.
Also
, giv
en th
e in
crea
sing
limita
tions
with
the
posta
l ser
vice
, the
5th
of t
he fo
llow
ing
mon
th w
ould
onl
y be
app
ropr
iate
if th
is is
the
date
by
whi
ch th
e PA
YE
retu
rn is
requ
ired
to b
e su
bmitt
ed
by th
e em
ploy
er (r
athe
r tha
n re
ceiv
ed b
y In
land
Rev
enue
).
5.24
Do
you
agre
e th
at IR
56 ta
xpay
ers s
houl
d re
mai
n re
spon
sible
for s
ubm
ittin
g th
eir o
wn
PAY
E in
form
atio
n an
d pa
ying
thei
r ow
n PA
YE
dedu
ctio
ns
to In
land
Rev
enue
, rat
her t
han
thei
r em
ploy
ers?
We
agre
e th
at IR
56
taxp
ayer
s sho
uld
rem
ain
resp
onsib
le fo
r su
bmitt
ing
thei
r ow
n PA
YE
info
rmat
ion
and
payi
ng th
eir o
wn
PAY
E de
duct
ions
to In
land
Rev
enue
.
5.25
Do
you
thin
k th
at IR
56 ta
xpay
ers s
houl
d ha
ve to
pr
ovid
e th
eir P
AY
E in
form
atio
n to
Inla
nd R
even
ue
earli
er (f
or e
xam
ple,
by
the
5th
of th
e fo
llow
ing
mon
th),
or d
o yo
u th
ink
that
by
the
20th
of t
he m
onth
fo
llow
ing
paym
ent i
s stil
l suf
ficie
nt?
We
cons
ider
that
20th
of t
he m
onth
follo
win
g pa
ymen
t fili
ng is
ap
prop
riate
(see
abo
ve) f
or IR
56
filer
s.
21
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16
6.1
Shou
ld th
e tim
ing
and
proc
ess o
f em
ploy
ers’
PA
YE
paym
ent o
blig
atio
ns b
e al
igne
d w
ith th
e pr
oces
s of
payi
ng sa
lary
and
wag
es to
em
ploy
ees?
We
stron
gly
disa
gree
that
the
timin
g an
d pr
oces
s of e
mpl
oyer
s’
PAY
E pa
ymen
t obl
igat
ions
shou
ld b
e al
igne
d w
ith th
e pr
oces
s of
pay
ing
sala
ry a
nd w
ages
to e
mpl
oyee
s. Th
is re
sults
in a
tim
ing
bene
fit to
Gov
ernm
ent a
nd is
aim
ed a
t sec
urin
g th
e fu
nds
as so
on a
s pos
sible
, to
prev
ent r
isk o
f em
ploy
er d
efau
lt. It
shou
ld
acco
rdin
gly
be a
ckno
wle
dged
as s
uch,
rath
er th
an a
s a
com
plia
nce
cost
savi
ng fo
r em
ploy
ers.
The
curre
nt c
ash-
flow
ben
efit
to e
mpl
oyer
s fro
m h
oldi
ng P
AY
E de
duct
ions
, prio
r to
rem
ittan
ce to
Inla
nd R
even
ue, i
s lik
ely
to b
e an
impo
rtant
wor
king
cap
ital b
enef
it fo
r man
y bu
sines
ses.
It al
so
reco
gnise
s tha
t em
ploy
ers a
re a
n im
porta
nt, b
ut “
unpa
id”,
in
term
edia
ry in
the
tax
syste
m.
The
loss
of t
his b
enef
it, p
artic
ular
ly w
hen
empl
oyer
s will
be
requ
ired
to in
cur t
rans
ition
al c
osts
to u
pdat
e th
eir p
ayro
ll sy
stem
s, w
ill re
sult
in a
net
loss
to e
mpl
oyer
s and
we
expe
ct is
lik
ely
to c
reat
e re
sista
nce
to c
hang
e.
In a
dditi
on, r
eal-t
ime
paym
ent w
ill e
xpos
e em
ploy
ers t
o po
tent
ial p
enal
ties i
f the
PA
YE
info
rmat
ion
is in
corre
ct (a
s the
re
will
be
no ti
me
for e
rror c
orre
ctio
n).
6.2
Do
you
thin
k th
is al
ignm
ent w
ould
incr
ease
or r
educ
e co
mpl
ianc
e co
sts a
nd e
ffort?
If y
ou c
an q
uant
ify th
e ef
fect
, ple
ase
do so
.
We
cons
ider
that
the
com
plia
nce
costs
and
effo
rt w
ould
be
high
in
ord
er to
ens
ure
that
PA
YE
syste
ms a
nd p
roce
sses
do
not
cont
ain
any
erro
rs to
ens
ure
PAY
E is
not u
nder
paid
.
As p
er o
ur c
omm
ent a
bove
, we
cann
ot se
e an
y ne
t pos
itive
s for
em
ploy
ers.
22
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16
6.3
Do
you
belie
ve th
at th
e tim
ing
of P
AY
E pa
ymen
ts m
ade
to In
land
Rev
enue
is n
eces
saril
y lin
ked
to
whe
n PA
YE
info
rmat
ion
is pr
ovid
ed?
As n
oted
abo
ve, w
e do
not
bel
ieve
the
timin
g of
info
rmat
ion
and
PAY
E pa
ymen
ts ne
eds t
o be
link
ed.
6.4
Do
you
thin
k PA
YE
paym
ent t
o In
land
Rev
enue
on
a pa
y da
y ba
sis w
ould
influ
ence
the
frequ
ency
with
w
hich
you
will
pay
you
r sta
ff?
We
do n
ot b
elie
ve th
at th
e tim
ing
of P
AY
E pa
ymen
ts to
Inla
nd
Reve
nue
is lik
ely
to in
fluen
ce th
e fre
quen
cy o
f pay
men
t to
staff.
Th
is is
beca
use
othe
r com
mer
cial
fact
ors,
such
as e
xisti
ng
empl
oyee
con
tract
s, w
ill h
ave
a gr
eate
r bea
ring
on th
e pa
ymen
t fre
quen
cy. H
owev
er, a
s not
ed a
bove
a p
ay d
ay P
AY
E pa
ymen
ts ba
sis w
ill c
ome
at a
cas
h-flo
w c
ost t
o em
ploy
ers w
hich
is li
kely
to
cre
ate
resi
stanc
e to
cha
nge.
6.5
Do
you
thin
k fo
r IR5
6 ta
xpay
ers t
he d
ue d
ate
for
paym
ent o
f PA
YE
dedu
ctio
ns sh
ould
rem
ain
alig
ned
with
the
due
date
for p
rovi
ding
PA
YE
info
rmat
ion
to
Inla
nd R
even
ue?
Yes
. We
belie
ve th
e 20
th o
f the
follo
win
g m
onth
is a
ppro
pria
te
for P
AY
E pa
ymen
ts fo
r IR
56 ta
xpay
ers.
7.1
If yo
u co
uld
subm
it G
ST in
form
atio
n di
rect
ly fr
om
inte
grat
ed a
ccou
ntin
g so
ftwar
e in
the
way
des
crib
ed
abov
e, w
ould
this
redu
ce o
r inc
reas
e yo
ur
com
plia
nce
effo
rt an
d co
sts?
If yo
u ca
n qu
antif
y th
e am
ount
, ple
ase
do so
.
In th
e sh
ort-t
erm
, we
expe
ct th
e co
mpl
ianc
e ef
fort
and
costs
w
ould
incr
ease
for b
usin
esse
s to
adop
t the
new
app
roac
h. T
his
is be
caus
e w
e ex
pect
man
y bu
sines
ses m
ay n
eed
to im
prov
e th
e qu
ality
of t
heir
acco
untin
g pr
oces
ses a
s wel
l as t
he a
ccur
acy
of
info
rmat
ion
that
is in
put i
nto
thei
r sys
tem
s.
7.2
Are
ther
e ad
ditio
nal i
ssue
s tha
t nee
d to
be
cons
ider
ed
whe
n th
inki
ng a
bout
how
the
prop
osed
new
dig
ital
serv
ices
wou
ld w
ork
for t
hird
par
ties,
such
as t
ax
agen
ts, ta
x ad
viso
rs, a
ccou
ntan
ts an
d bo
okke
eper
s, in
re
latio
n to
the
prov
ision
of G
ST in
form
atio
n?
As p
er o
ur g
ener
al c
omm
ents
abov
e, w
e ex
pect
that
ther
e w
ill b
e iss
ues w
ith a
djus
tmen
ts (e
.g. c
orre
ctio
n of
erro
rs a
nd u
nusu
al
trans
actio
ns e
tc.).
Third
par
ties s
uch
as ta
x ag
ents
shou
ld b
e ab
le to
vie
w c
lient
s’
GST
(and
PA
YE)
info
rmat
ion
and
corre
spon
d w
ith In
land
Re
venu
e on
thes
e m
atte
rs (e
.g. t
o re
ques
t am
endm
ents
if ne
cess
ary)
in re
al-ti
me.
We
have
also
exp
erie
nced
del
ays i
n
23
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16re
giste
ring
clie
nts f
or G
ST, d
ue to
lack
of u
nder
stand
ing
of
clie
nts’
pos
ition
s or t
he la
w (a
nd, i
n so
me
case
s, In
land
Re
venu
e’s o
wn
publ
ished
ope
ratio
nal p
ract
ice)
.
7.3
Do
you
supp
ort t
he p
ropo
sal t
hat a
dopt
ing
the
new
di
gita
l ser
vice
s sho
uld
be v
olun
tary
for G
ST
info
rmat
ion?
We
agre
e th
at a
dopt
ion
shou
ld b
e vo
lunt
ary.
A c
ompu
lsory
re
quire
men
t wou
ld im
pose
disp
ropo
rtion
ate
com
plia
nce
costs
on
smal
ler t
axpa
yers
to u
pgra
de th
eir a
ccou
ntin
g sy
stem
s.
7.4
Wou
ld y
ou ta
ke u
p th
e ne
w G
ST se
rvic
es?
If yo
ur
answ
er is
“it
depe
nds”
, wha
t doe
s it d
epen
d on
? W
e be
lieve
that
upt
ake
of th
e ne
w G
ST se
rvic
es w
ill d
epen
d on
w
heth
er th
ere
is an
y no
ticea
ble
bene
fit fo
r bus
ines
s ove
r the
cu
rrent
GST
filin
g sy
stem
. The
shor
t-ter
m c
ost t
rade
-off
agai
nst
long
er te
rm b
enef
its (f
rom
mor
e ac
cura
te sy
stem
s) w
ill d
iffer
by
busin
ess.
For e
xam
ple,
larg
er b
usin
ess m
ay b
e m
ore
acce
ptin
g of
th
is tra
de-o
ff (p
artic
ular
ly if
thei
r acc
ount
ing
syste
ms a
re a
lread
y re
ason
ably
robu
st) a
nd/o
r hav
e lo
wer
tran
sitio
nal c
osts.
In a
dditi
on, t
he p
ropo
sed
new
dig
ital s
ervi
ces c
ould
exp
ose
taxp
ayer
s to
mor
e er
rors
in th
e sh
ort-t
erm
and
may
dis-
ince
ntiv
ise ta
xpay
ers f
rom
mov
ing
to th
e ne
w d
igita
l ser
vice
s, es
peci
ally
if th
ose
erro
rs a
ttrac
t pen
altie
s.
7.5
Do
you
supp
ort t
he p
ropo
sal t
hat G
ST re
fund
s sho
uld
only
be
mad
e by
dire
ct c
redi
t int
o a
custo
mer
’s
nom
inat
ed b
ank
acco
unt u
nles
s it w
ould
cau
se u
ndue
ha
rdsh
ip to
a c
usto
mer
or i
s not
pra
ctic
able
?
We
supp
ort t
he p
ropo
sal t
hat G
ST re
fund
s sho
uld
only
be
mad
e by
dire
ct c
redi
t unl
ess i
t wou
ld c
ause
und
ue h
ards
hip
or is
im
prac
ticab
le. H
owev
er, t
his s
houl
d no
t nee
d to
be
a N
ew
Zeal
and
bank
acc
ount
. We
note
that
this
is a
new
requ
irem
ent i
n or
der f
or a
non
-resid
ent t
o ob
tain
an
IRD
num
ber.
This
has
crea
ted
signi
fican
t del
ays f
or n
on-re
siden
ts in
regi
sterin
g in
New
Ze
alan
d.
7.6
Do
you
thin
k G
ST-re
giste
red
pers
ons o
ver a
cer
tain
th
resh
old
shou
ld b
e re
quire
d to
subm
it th
eir G
ST
We
do n
ot su
ppor
t a c
ompu
lsory
ele
ctro
nic
filin
g th
resh
old
for
GST
. We
expe
ct o
ver t
ime,
with
the
deve
lopm
ent o
f tec
hnol
ogy,
24
Polic
y an
d St
rate
gy, I
nlan
d Re
venu
eK
PMG
subm
issi
on -
“Mak
ing
Tax
Sim
pler
: Bet
ter
Adm
inis
trat
ion
of P
AYE
and
GST
”19
Feb
ruar
y 20
16in
form
atio
n to
Inla
nd R
even
ue in
an
elec
troni
c fo
rmat
? th
at th
e nu
mbe
r of e
lect
roni
c fil
ings
will
incr
ease
nat
ural
ly.
Com
pulsi
on is
ther
efor
e no
t req
uire
d, in
our
vie
w.
7.7
At w
hat l
evel
do
you
thin
k su
ch a
thre
shol
d sh
ould
be
set?
N
o co
mm
ent.
