If National wins ...

[Vaygor1]

As for tax avoidance legal or otherwise any tax system must be seen to be fair. A minor example is where FP and any business man ,farmer can claim vehicle expenses related to their business. A wage earner cannot claim the cost of transport to their place of work. Which is a cost of employment. As EZ says you can run a business at a loss and end up with an asset at reduced cost if you have the capital.

westerly

A company car used to get to and from work attracts a very onerous Fringe Benefit Tax from the business entity. if you're talking about a company car, at least the business can rightfully claim depreciation.
If an asset acquired 'at reduced cost' (company car or otherwise) can earn enough future income such that the business is sustainable then taxable profits will arrive.
If the said asset acquired does not earn future income then its worth as a non-liquid asset achieves nothing unless it is sold for a profit.
If the asset acquired is sold in the future for more than its book value then the tax department gets their money by way of recovery on depreciation.

[artemis]

Much is made of Labours CGT proposals but what is quietly ignored is there was to be an expert review before it was implemented. The howls of opposition from those who may have been effected including JK were probably to be expected. Like raising the age of qualifying for Super. CGT will happen. ...... westerly

The CGT policy, including principles and quite a bit of detail was published well before the last 2 elections. More than once actually. I would not expect any expert group to recommend more than minor changes in order to clarify specific situations. Unfortunately Labour did not handle the proposed CGT well at all, and only managed to skate over issues because (a) most people believed the false spin that it was aimed at housing speculators and (b) it was OK for the eyes to glaze over as it was someone else's problem.

There is now a wider, though still imperfect, understanding of the impact of CGT on ordinary folk. It will be a lot more difficult for Labour to have CGT as a central plank in 2017, as it will be under a lot more scrutiny over the next 3 years. It's a lose/lose for Labour. If they keep it there'll be a lot of pressure on them to refine it properly, and a good deal of criticism from many directions. If they ditch it they look weak and ill prepared.

[westerly]

I doubt that many business people are so concerned with such trivia as cheating on their vehicle apportionment. Some will though, and some employees use the bosses vehicles for pvt. running, pinch stationery, and find ways to help themselves to various 'perks'. Business people cannot claim the cost of driving to work, as you claim, unless they meet strict criteria such as using a sign-written vehicle.
http://www.ird.govt.nz/business-inco...s/vehicle-exp/

Note that travel from home to and from work is not a business expense.

And why you think operating any business at a loss is a good idea, or benefits the owner, is beyond me.

Perhaps I should have said develop a business by off setting the costs against tax on other income. As for the transport cost you are correct re the travel to work situation.
However I agree with EZ that there are many legal options for self employed to reduce taxation not available to the wage earner.

westerly

[fungus pudding]

Perhaps I should have said develop a business by off setting the costs against tax on other income. As for the transport cost you are correct re the travel to work situation.
However I agree with EZ that there are many legal options for self employed to reduce taxation not available to the wage earner.

westerly

There would hardly be an advantage in charging costs from one business to another. It seems to me that you think all sorts of people other than wage earners are ripping off the system. Most aren't. The biggest area of loss to the IRD is among tradesmen and home service type industries simply failing to declare payment, according to the IRD. But often the benefit goes to or is shared by the person paying them. Therefore it's reasonable to assume the majority of those benefitting from ripping off the tax system are wage earners, because most NZers are wage earners.

[craic]

Agreed. Cash jobs are an integral part of our economy now an most, or many, people have have a collection of tradesmen or service providers who might do a job for cash. One of the major benefits is not money saved jumping the queue ahead of others to get something done. And while the taxman may have a loss on the transaction the benefitting providor will spend the money and pay tax anyway. It may be a form of fraud but it is rampant among Labour supporters as well as National supporters. Maybe a few Greens in there too? Possibly keeps a few jobs alive in hard times? Many years ago I had a friend in a Dairy/ grocery shop who made friends with the butcher across the road. Both were struggling against the big supermarkets but a little trade-and-exchange kept both businesses alive.

[couta1]

Cash jobs are worth 10 billion dollars a year and everyone has or is partaking of this system ranging from politicians from all parties to IRD employees and it ain't going away any time soon though a 20% flat tax rate would help a lot to change things.

[fungus pudding]

Cash jobs are worth 10 billion dollars a year and everyone has or is partaking of this system ranging from politicians from all parties to IRD employees and it ain't going away any time soon though a 20% flat tax rate would help a lot to change things.

It would indeed reduce evasion through not declaring payment. Unfortunately the term 'cash jobs' is erroneously used to mean under the counter jobs. If you are quoted a cash price it doesn't mean that it will not be declared. It may simply mean the merchant is not prepared to give credit. There is nothing wrong at all with demanding cash or paying cash. The evasion arises when or if it is not declared. Whoever pays cash is doing nothing wrong as long as he/she has not colluded in the fact that it will not be declared.

[couta1]

It would indeed reduce evasion through not declaring payment. Unfortunately the term 'cash jobs' is erroneously used to mean under the counter jobs. If you are quoted a cash price it doesn't mean that it will not be declared. It may simply mean the merchant is not prepared to give credit. There is nothing wrong at all with demanding cash or paying cash. The evasion arises when or if it is not declared. Whoever pays cash is doing nothing wrong as long as he/she has not colluded in the fact that it will not be declared.

Agree FP,the 10 billion figure is for the black economy so would only include under the counter jobs a huge sum in anyones book.

[nextbigthing]

Craic a Labour supporter would never ever take or pay a 'non tax cash job' and I have that on very good authority because my mate who used to be a Labour MP told me so. Taito Philip Fields was his name. Good bloke. Haven't seen him in a while. Last I heard he was doing up a house.

[Sgt Pepper]

Cash jobs are worth 10 billion dollars a year and everyone has or is partaking of this system ranging from politicians from all parties to IRD employees and it ain't going away any time soon though a 20% flat tax rate would help a lot to change things.

Couta : If the answer is a flat tax rate, i.e. increase revenue while decreasing tax then WHY DONT GOVERNMENTS DO IT??