Workers who are paying too much tax due to incorrect secondary tax codes are set for relief after legislation simplifying the process and tailored PAYE codes was passed through Parliament. Inland Revenue will also simplify the process for individuals applying for tailored tax codes which better match their earning circumstances, including an online process.
The legislation will also enable automatic tax refunds for around 750,000 New Zealanders every year when it comes into effect next month. The Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill will come into effect on April 1, 2019 after passing its third reading, Minister of Revenue Stuart Nash announced in a recent statement.
The changes will allow the IRD to "more closely monitor the tax paid by wage and salary earners through the year" which overtaxed individuals receiving IRD recommendations to "suggest a more suitable PAYE tax code tailored to that worker.”
"The simplified tax rules remove the need for people who only earn employment or investment income to file a personal tax summary (PTS) to get a tax refund. Till now, the only way to get a refund was to file a PTS. However 750,000 people failed to do so and miss out on their money as a result. We want refunds to flow automatically," he said.
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