For those new to business this will make things easier, as the dates for the current provisional tax system can be easily forgotten. Businesses generally rely on their accountant or tax agent to let them know dates for payment -- sometimes it can come as an unplanned surprise.
For those who know how to leverage their money there is a drawback because it will mean that the government will be getting their share more often. Some are able to squirrel money away on personal debt to save interest costs -- drawing these funds back as needed.
Businesses would also be encouraged to send their PAYE and GST details straight from their accounting systems rather than filing separate returns. This is the next evolution of accounting systems. Reducing steps means reduction of error and efficiency; this will reduce barriers to business and encourage others to enter.
The IRD says it wants to help cut the cost of compliance for small to medium businesses. Of course, it also means that businesses effectively take on some of the administration work that the IRD would usually do, cutting its bill too.
Using technology and digital processes well offers big benefits to businesses, so anything that encourages that should be applauded.
A requirement to check in regularly on tax obligations could help keep more businesses in tune with their numbers.
It would be nice to see the Government come up with a flexible system that meets the needs of the different businesses and business structures operating in New Zealand today.
