PAYE for business, an idea worth exploring

Todd McClay has announced he is looking at the possibility of PAYE for business.

Long awaited tax modernisation proposals were unveiled today by Revenue Minister Todd McClay.

A form of business PAYE, along with greater use of withholding taxes to deal with fringe benefits, interest and other investment income has been flagged.

The government is also looking at reversing the move, made in 1998, to allow most New Zealanders to no longer file tax returns.

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The government has also set up a group with developers and businesses in a bid develop a system to integrate GST and PAYE information.

Firms such as Xero and MYOB are involved ? Xero chief executive Rod Dury has publicly, in the past, criticised the government?s approach on the transformation of IRD but has since muted those criticisms.

?Integrating tax information into normal business practices is an attractive idea but it creates some challenges in potentially requiring every employer to move to digital,? Mr McClay said in his speech today.

?We need to be careful we?re not simply shifting costs from government to business.?

I think PAYE for business could be really useful…so long as they do away with Provisional an Terminal Tax.