Consumer NZ raises tax concern

Last updated 18:00 12/06/2014

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The proliferation of companies offering to help people get tax refunds is a sign Inland Revenue may not be working as well as it should, Consumer NZ says.

Chief executive Sue Chetwin said the consumer body had surveyed about 700 of its members and found 70 per cent believed the tax system was responsive and fair.

But she said the demand for tax-refund services might be because the tax-take was "now tipped in the IRD's favour".

Earlier today, Revenue Minister Todd McClay indicated reforms of provisional tax were likely, which would ensure business owners would not need to forecast their tax bills far in advance.

KPMG tax partner Paul Dunne said high interest charges and penalties imposed by Inland Revenue for underpayment meant that many businesses chose to be "conservative" and overpay.

Chetwin said it was positive that many people did not now have to file tax returns, but was concerned they were paying more tax than if they had, and then needed the help of intermediaries to claim back their overpayments.

"Why not tax better in the first place?" she asked.

Some consumers might not understand the fees charged by tax refund businesses, she believed, and the information available to consumers "is not as good as it should be".

Chetwin indicated she expected the Commerce Commission to act on those concerns.

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