Fewer People to face end of year Tax Bills
The Government is moving to ease financial stress for around 149,000 taxpayers by changing the rules around write-offs for tax debt.
“Fewer people will have tax bills to pay this year,” said Revenue Minister Stuart Nash.
“Inland Revenue’s end of year automatic income tax calculation process for individuals is currently underway and is expected to run until early July. It is the annual wash up which results in people either having tax to pay or receiving a refund.
“For the 2019/20 income tax year, tax payable up to $200 will be written off. The usual threshold for writing off tax is $50.
“Increasing the write-off threshold will reduce tax bills for approximately 149,000 taxpayers. Writing off those amounts of tax may not seem huge to everyone, but it can be significant for someone experiencing financial stress.
“In the 2018/19 year for example, around half of those who had a tax bill up to $200 were earning less than $60,000 a year. We’re doing everything we can to help households as we move into the economic recovery phase.
“The auto-calc process has meant that people have already started receiving refunds. As at 10 June, there have been 2.3 million assessments carried out resulting in $586 million in tax refunds and $118 million in tax bills to pay.
“Once the process is complete, Inland Revenue expects to issue refunds in excess of $650 million as part of individual income tax assessment process.
“This change was agreed last week but legislation is still required to amend the returns for the 2019/20 tax year. For following tax years, the threshold will revert to the $50 limit,” Mr Nash said.
The auto-calc process applies to people whose income is only salary, wages, interest or dividends, not those who use the IR 3 tax return.