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The pulse of Kiwi-Indians
3 June, 2016 Vol. 8 Issue 11
www.iwk.co.nz
NZ’s first Kiwi-Indian weekly newspaper 
kiwi indian hall of fameis here
June 23, 2016
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3 June 2016 | 
www.iwk.co.nz
 
2
Face of the week
Theatre and beyond
I am woman
Three Kiwi women honoured at WEF 2016
Sports
Sunrisers Hyderabad clinch the IPL 2016 title
India abroad
Microsoft seeks to empower every Indian: Satya Nadella
Techmate
In-car entertainment to be driven by your smartphone
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New Zealand
Industry leaders to address INZBC Summit 2016
CONTENTS
 
www.iwk.co.nz
 | 3 June 2016
3
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Budget 2016: key highlights
Last week, Finance Minister Bill English delivered the National governments eight Budget. We take a look at the key points discussed and its implications.
 Sanjay Kumar
 Vidya Garimella
Business transformation
T
he National government’s eighth Budget, delivered on May 26 by Finance Minister Bill English, has the long game in mind.Revenue Minister Michael  Woodhouse has secured a net $857 million to deliver a modern tax system over the next four years.  A major business transformation is planned, aimed at making it easier for all New Zealanders to meet their obligations. As Woodhouse says, “It is important that our tax system keeps pace with changes in New Zealanders’ expectations and changing business models.” No one ever won a popularity poll by making it easier to pay out money but a great tax system does matter for our economy. Updating our approach for the digital age is the right call.  Woodhouse wants small  businesses to be able to devote more time to business rather
than tax. “Businesses will nd
that meeting tax obligations  will become part of their normal processes, rather than a separate activity.”
Inland Revenue budget cuts
 W 
hat Woodhouse chooses not to emphasise is the extent to which the business
transformation depends on nding
savings from existing Inland Revenue budgets. Alongside the $857 million additional funding, Inland Revenue faces a $284 million by 2020. That saving will be recycled back into  business transformation. What that means to the shape of the existing department isn’t yet
clear. We think it will mean sta cuts. In ve years’ time, the IRD is likely to look dierent with fewer
document processing centres and fewer debt collectors and auditors, and reduced corporate overheads as the result of increased digital and automated compliance.
A pound o sca sh
I
t would be a mistake to ignore the main purpose of the tax system: to raise money. The government expects $250 million extra tax through better
compliance as a result of the IRD’s
 business transformation. That revenue is kicking in from 2019 and English has already booked the money.
International tax
N
o changes yet, but we have  been warned. English sets out his position in stark terms: “We are making further changes targeted at multinational
companies.” He hasn’t specied
 what these changes will be but it is clear that information exchange is high on the list after the government’s recent signing of the multilateral competent authority agreement to apply a common reporting standard with other tax authorities. We were concerned  we’d see a rushed reaction. Taking a careful look at our international tax settings is the right approach for New Zealand.
Tax simpication or
SMEs
T
he main SME tax package  was announced in April 2016 as part of the wider business transformation programme. It includes a pay-as-you-go option for provisional tax for small  businesses from 2018 onwards and eliminating or reducing use-of-money interest for several taxpayers. Contractors can also choose a withholding rate, rather than having a rate set for them. New debt incurred from April 1, 2017  will not be subject to the one per cent monthly penalty but subject only to immediate penalties and interest charges for late payments. This package is expected to cost $187 million over the next four years.In summary, the government is focused on maintaining a healthy
scal spending policy and allowing
the economy to bubble along at a respectable 2.8% growth rate.
 Sanjay Kumar is an Executive  Director and Vidya Garimella is a  Senior Consultant at EY 

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