3. Increase the Not met Partially met Partially met This option would have a safe harbour greater fiscal cost than option threshold to Higher threshold brings Reduces compliance costs for some Provides more 2 which makes this less viable $70,000 and more sophisticated taxpayers, and for taxpayers who have no certainty on the for government. expansion of taxpayers into the safe real issues with provisional tax as their application of UOMI safe harbour harbour. business processes include forecasting and for some, but makes from UOMI to budgeting. little difference to These taxpayers should those at the top end of individuals have sufficient ability to the scale. determine their tax position without safe harbour which creates unfairness to those who cannot. 4. Increase to Not met Not met Met Marginal revenue impact the safe harbour from Changes to the safe harbour Increases administration for Inland UOMI to to increase it to $60,000 Revenue in having to change systems for a $60,000 with without extending it to very small group of taxpayers. no extension would not have to a large effect on taxpayers Reduced compliance costs for the limited individuals because of the narrow number of taxpayers who are affected, but group of taxpayers that may not outweigh the costs. would benefit. This provides an inequity to taxpayers because of the vehicle of choice they have made for predominately non-tax reasons (e.g. limited liability).
3. Increase the safe harbour threshold to $70,000 and expansion of safe harbour from UOMI to Not met Higher threshold brings more sophisticated taxpayers into the safe harbour. These taxpayers should have sufficient ability to determine their tax position without safe harbour which creates unfairness to those who cannot. Partially met Reduces compliance costs for some taxpayers, and for taxpayers who have no real issues with provisional tax as their business processes include forecasting and budgeting. Partially met Provides more certainty on the application of UOMI for some, but makes little difference to those at the top end of the scale. This option would have a greater fiscal cost than option 2 which makes this less viable for government. 4. Increase to the safe harbour from UOMI to $60,000 with no extension to Not met Changes to the safe harbour to increase it to $60,000 without extending it to would not have a large effect on taxpayers because of the narrow group of taxpayers that would benefit. This provides an inequity to taxpayers because of the vehicle of choice they have made for predominately non-tax reasons (e.g. limited liability). Not met Increases administration for Inland Revenue in having to change systems for a very small group of taxpayers. Reduced compliance costs for the limited number of taxpayers who are affected, but may not outweigh the costs. Met Marginal revenue impact individuals individuals
2016-ris-bteirm-bill-4.docx