Neutrality* Efficiency Certainty and Effectiveness Fiscal simplicity* and fairness* impact Within sectors Between Compliance Administration sectors Option 1: Allowing Increased - value Increased Decreased - No change - IRD Increased - no Increased - Reduced – added is taxed GST gold compliance costs monitors special rule for gold. results in taxation revenue – secondhand goods is otherwise neutral treated the same as comparable to taxpayers’ Rules consistent of consumption of decrease deductions between businesses most other other secondhand compliance with with the rest of the gold. estimated at and transaction types. secondhand goods. goods. the rules (as with Act. $0.4 million other tax rules). per annum. Some uncertainty regarding past positions. objective Meets objective Meets objective objective Meets objective Meets objective Option 2: Allowing - value - - IRD - no - Increased Increased Decreased No change Increased Increased Reduced – added is taxed GST gold compliance costs monitors special rule for gold. results in taxation revenue secondhand goods – is otherwise neutral treated the same as comparable to taxpayers’ consistent with of consumption of decrease deductions – between businesses most other other secondhand compliance with the rest of the Act. gold. estimated at retrospective and transaction types. secondhand goods. goods. the rules (as with $0.4 million (officials’ preferred other tax rules). Past positions per option) preserved. Some returns One-off cost would need to be forecast at reopened. $1.6 million. Meets objective Meets objective Meets objective Meets objective Meets objective objective Option 3: Status No change - No change - No change - No change - IRD No change - rules No change - No change. businesses secondhand gold compliance costs monitors more complex and results in taxation quo disadvantaged treated less higher than other taxpayers’ less consistent, upon supply of compared to favourably than secondhand goods compliance with require greater gold, rather that unregistered other secondhand as purchaser must the rules (as with understanding. upon businesses. goods. determine gold other tax rules). consumption. metal content. Some uncertainty Non-compliance regarding past distorts competition. positions. Does not meet Does not meet Does not meet Meets objective Does not meet Does not meet objective objective objective objective objective
Neutrality* Efficiency Certainty and simplicity* Effectiveness and fairness* Fiscal impact Within sectors Between sectors Compliance Administration Option 1: Allowing secondhand goods deductions Increased - value added is taxed – GST is otherwise neutral between businesses and transaction types. Increased gold treated the same as most other secondhand goods. Decreased - compliance costs comparable to other secondhand goods. No change - IRD monitors taxpayers’ compliance with the rules (as with other tax rules). Increased - no special rule for gold. Rules consistent with the rest of the Act. Some uncertainty regarding past positions. Increased - results in taxation of consumption of gold. Reduced – revenue decrease estimated at $0.4 million per annum. objective Meets objective Meets objective objective Meets objective Meets objective Option 2: Allowing secondhand goods deductions – retrospective (officials’ preferred option) Increased - value added is taxed – GST is otherwise neutral between businesses and transaction types. Increased gold treated the same as most other secondhand goods. Decreased - compliance costs comparable to other secondhand goods. No change - IRD monitors taxpayers’ compliance with the rules (as with other tax rules). Some returns would need to be reopened. Increased - no special rule for gold. consistent with the rest of the Act. Past positions preserved. Increased - results in taxation of consumption of gold. Reduced – revenue decrease estimated at $0.4 million per One-off cost forecast at $1.6 million. Meets objective Meets objective Meets objective Meets objective Meets objective objective Option 3: Status quo No change - businesses disadvantaged compared to unregistered businesses. Non-compliance distorts competition. No change - secondhand gold treated less favourably than other secondhand goods. No change - compliance costs higher than other secondhand goods as purchaser must determine gold metal content. No change - IRD monitors taxpayers’ compliance with the rules (as with other tax rules). No change - rules more complex and less consistent, require greater understanding. Some uncertainty regarding past positions. No change - results in taxation upon supply of gold, rather that upon consumption. No change. Does not meet objective Does not meet objective Does not meet objective Meets objective Does not meet objective Does not meet objective
2016-ris-archcrm-bill-04.docx