The role of CA ANZ’s New Zealand tax team is to advocate on a ‘what’s best for New Zealand’ basis and to keep our members informed on key tax policy developments. The government’s initial NZ$12 billion COVID-19 support package was introduced in mid-March. It included the first phase of the wage subsidy scheme and an announcement on the Commissioner of Inland Revenue’s ability to waive interest on late paid tax.

These measures were welcome, but there were several tax considerations not immediately apparent in the official media release. A key question, with tax deadlines looming, was whether the very generous approach outlined in the media release reflected an extension of the enacted legislation.

Through CA ANZ’s involvement with Inland Revenue and the development of answers to frequently asked questions, we have been able to provide greater certainty for our members and taxpayers. 

Assisting CA ANZ members

The first few days of New Zealand’s lockdown were largely dedicated to understanding the support packages and fielding queries from members. Our team received more contact from members on COVID-19 than any other topic in the 2019-20 year. Communicating to members quickly and efficiently –at scale – became important.

Initially, we found My CA a great tool to post updates to members as we received clarifications from Inland Revenue. The member webinar series was also crucial and let us reach hundreds of members at once, imparting key information and answering their questions in near real time. During the COVID-19 lockdown, more than 2000 members watched these live tax sessions.

The April level four lockdown was announced as members were in the final days of completing 31 March returns. We could see that adapting to working from home at the busiest time of the year would put a lot of strain on our members and their clients.

CA ANZ asked Inland Revenue to think about practical relief for these members and we were pleased that tax agents were given extra time to add clients to their deferred filing list. We were also pleased with the announcement that no action would be taken for failing to meet agency filing percentages this year.

CA ANZ members are an ideas pool

We didn’t just receive questions and calls for immediate support. We were overwhelmed by members reaching out to share their ideas on how New Zealand’s tax system could be leveraged to improve the COVID-19 response. We had so many conversations that started, “I’ve only got a second, but I wanted to help, have you thought of…?”

Every business and every industry are different, and there is no single solution to a problem as large as COVID-19. That’s why hearing insights from members was valuable to informing our advocacy. A practical suggestion from a member led to the low value asset regime being backdated to 17 March, allowing more businesses to write off the cost of setting up their staff to work from home.

There was a lot of work behind the scenes to clarify and refine the tax legislation and response to COVID-19. We were grateful for the support and expertise of our Tax Advisory and National Tax Liaison groups.

We triaged and collated a wide range of suggestions from members to provide government with an arsenal of options to improve its COVID response. Work continues to develop these ideas.

Moving into the recovery phase

Government’s response to COVID-19 has delivered on areas of tax reform that CA ANZ has been calling for for some time. As we begin to transition into the recovery phase, changes such as reintroducing building depreciation, increasing the provisional tax threshold and allowing businesses to write off low-value assets will assist to stimulate investment and cash flow.

Businesses need a range of options to recover from the impact of COVID-19, and normal policy development processes could slow recovery. CA ANZ is pleased Inland Revenue is taking a pragmatic approach to providing quick relief mechanisms for businesses, such as introducing the temporary loss carry back scheme. While this temporary scheme isn’t without a few fish hooks, work is underway on a permanent measure to be introduced later in the year.

The world will be a different place when we come out of COVID-19, but our team and our members will still have New Zealand’s best interests at heart.

“The world will be a different place when we come out of COVID-19, but our team and our members will still have New Zealand’s best interests at heart.”

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