Options Fairness and equity Efficiency of compliance and Sustainability of tax system Revenue administration 1. Status quo Met Not met Met No impact Generally fair. Inefficient, as taxpayers must to Inland Revenue to small errors. 2. Increase threshold to Met Met Met No impact $1,000 More efficient, as taxpayers Although less Inland Revenue can self-correct larger errors. oversight of error correction The measure will affect all slightly increases the taxpayers who make low value potential for abuse. minor errors. 3. Increase threshold to Met Met Partially met No impact $2,000 As above, except a greater As above, although the efficiency increase and impact impact on sustainability with the greater threshold. increases with the greater threshold. 4. Revenue percentage Not met Met Partially met Measure may be abused threshold Unfair as large taxpayers will As above. As above, except there could There might be an impact if be able to self-correct larger be a significant impact on large taxpayers abuse the errors, but arguably fair given sustainability for large measure to defer income; the relative significance of the taxpayers, as they could make however this is not possible error to the business. significant tax adjustments to estimate. without Inland Revenue oversight.
Options Fairness and equity Efficiency of compliance and administration Sustainability of tax system Revenue 1. Status quo Met Generally fair. Not met Inefficient, as taxpayers must to Inland Revenue to small errors. Met No impact 2. Increase threshold to $1,000 Met Met More efficient, as taxpayers can self-correct larger errors. The measure will affect all taxpayers who make low value minor errors. Met Although less Inland Revenue oversight of error correction slightly increases the potential for abuse. No impact 3. Increase threshold to $2,000 Met Met As above, except a greater efficiency increase and impact with the greater threshold. Partially met As above, although the impact on sustainability increases with the greater threshold. No impact 4. Revenue percentage threshold Not met Unfair as large taxpayers will be able to self-correct larger errors, but arguably fair given the relative significance of the error to the business. Met As above. Partially met As above, except there could be a significant impact on sustainability for large taxpayers, as they could make significant tax adjustments without Inland Revenue oversight. Measure may be abused There might be an impact if large taxpayers abuse the measure to defer income; however this is not possible to estimate.
2016-ris-bteirm-bill-4.docx