Options Fairness and equity Efficiency of compliance and Sustainability of tax Revenue administration system 1. Status quo Not met Not met Not met No impact The application of UOMI Taxpayers will continue to experience Some taxpayers will will continue to have a uncertainty in the application of UOMI to continue to view penal effect rather than a them, creating compliance costs. provisional tax in a use of funds effect for those negative light with the taxpayers who have Taxpayers who commit to paying a current rules providing unexpected income. minimum amount of tax through the uncertainty as to the standard method will continue to view total tax liability The application of UOMI to UOMI as a penalty. including interest. taxpayers who use the standard method will continue to have an impact on fairness aspects. 2. Remove the Met Met Met This measure has a revenue application of cost of $7.5 million and a UOMI for the Taxpayers who commit to Makes provisional tax simpler for the Increases certainty for cash-flow cost of $334 first two making a minimum level of majority of provisional taxpayers who taxpayers in terms of million over four years. provisional tax payments during a year currently use the standard method to their total liability to tax based on the best calculate their provisional tax. tax and UOMI for a instalments information available on year. for taxpayers their performance should Reduces administration as Inland who use the not be penalised by the Revenue will have a better picture of standard application of UOMI where provisional tax payments that will be method the actual liability is payable for a year. different. Increases the fairness to taxpayers of unexpected changes in income. 3. Remove the Not met Not met Met This measure has a application of prohibitive cash-flow and UOMI to revenue cost.
Options Fairness and equity Efficiency of compliance and administration Sustainability of tax system Revenue 1. Status quo Not met The application of UOMI will continue to have a penal effect rather than a use of funds effect for those taxpayers who have unexpected income. The application of UOMI to taxpayers who use the standard method will continue to have an impact on fairness aspects. Not met Taxpayers will continue to experience uncertainty in the application of UOMI to them, creating compliance costs. Taxpayers who commit to paying a minimum amount of tax through the standard method will continue to view UOMI as a penalty. Not met Some taxpayers will continue to view provisional tax in a negative light with the current rules providing uncertainty as to the total tax liability including interest. No impact 2. Remove the application of UOMI for the first two provisional tax instalments for taxpayers who use the standard method Met Taxpayers who commit to making a minimum level of tax payments during a year based on the best information available on their performance should not be penalised by the application of UOMI where the actual liability is different. Increases the fairness to taxpayers of unexpected changes in income. Met Makes provisional tax simpler for the majority of provisional taxpayers who currently use the standard method to calculate their provisional tax. Reduces administration as Inland Revenue will have a better picture of provisional tax payments that will be payable for a year. Met Increases certainty for taxpayers in terms of their total liability to tax and UOMI for a year. This measure has a revenue cost of $7.5 million and a cash-flow cost of $334 million over four years. 3. Remove the application of UOMI to Not met Not met Met This measure has a prohibitive cash-flow and revenue cost.
2016-ris-bteirm-bill-4.docx