The Inland Revenue Department (IRD) has for some time been upgrading their entire taxation system, starting with GST last year and culminating in income tax and all other information being brought into the new system this month.
The advantages of this will soon be apparent, as response time from correspondence queries should be shortened. For phone queries, the IRD agents will be able to immediately source all your information on one screen compared to the previous situation where they may have had to open up to 10 separate screens – this should shorten call and hold times with the IRD.
From an accountant’s perspective, there is now much more information available by way of reporting, along with actions that we can complete without having to refer to the IRD.
For taxpayers who previously did personal tax summaries (PTSs), or had these prepared by tax refund companies, the IRD will now generate these automatically. The department will deal with you directly and advise whether you have a refund or owe money. The advantage of this is that refunds due will automatically be generated and paid out without the need of an outside party. The disadvantage is that those who owe money will be required to pay – under the previous PTS rules, it was not compulsory to complete a PTS (for example, if money was owed).
Taxpayers whose bank account details are not held by the IRD, would be advised to consider provide them with those, as it will speed up the refund.
With Payday filing coming into effect on April 1, your earnings will be reported to the IRD regularly based on your pay periods. Any income on investments, such as interest and dividends, will also be reported to the IRD on a regular basis under the new monthly reporting regime. This will be available to all taxpayers, but in the case of PTS tax payers it will result in earlier refunds.
The changes will vastly improve the services the IRD provide and I’m looking forward to the benefits of the new system.
Hibiscus Matters’ new Finance columnist, Greg Douglas, has more than 35 years’ experience in looking after accounts for small to medium businesses as well as personal tax returns and schedules. The Gulf Harbour resident was a manager in business services for Coopers and Lybrand before becoming self-employed more than 25 years ago. His column will be monthly.