Government outlines plans for small business assistance

The Government is proposing a tax break for self-employed people in their first year of business and subsidising small business payroll compliance cost.

Associate Revenue Minister David Cunliffe released a discussion paper outlining a raft of amendments to tax law and other proposals.

Included among the ideas being considered are:

* Subsidising the fees of payroll agents to fill out PAYE and other tax matters from businesses with less than five employees;

* A 6.7 per cent discount for each dollar of tax paid by self-employed people in their first year of business;

* Basing provisional tax payments on GST turnover to help tax payments match with income flow; and

* Aligning provisional tax payment date with GST. This would probably mean more frequent but smaller payments for most businesses.

Mr Cunliffe said there were no figures on how much businesses might save from the moves if implemented, or how much they might cost the Government.

The proposals will now go out for six weeks of submissions with decisions made by Cabinet before Christmas. It was intended that any legislative changes would be brought in as part of next year's tax bill early next year.

- NZPA