Small business wins with new Provisional Tax System
Photo: Rod Drury.
The most significant change to the New Zealand tax system in years was announced on April 13 by Prime Minister John Key. This change is a new way of calculating Provisional Tax liability for small businesses and the self-employed.
Rod Drury, CEO at Xero, says, “This is huge for small businesses as Provisional Tax is the bane of small business owners’ lives. Previously they had to guess how much money their business might make in the future and forward pay this tax.
“As part of our Signals insights launch, we’re able to get right into the data from almost 10,000 small businesses and see what impact this has on small business. This change is incredibly exciting for small businesses and is a great example of what we can do in the cloud and the public-private partnership to make life better for small business.
“Under this new system, Xero will be able to enhance the current GST processes for small businesses, which means small business owners can pay their provisional tax returns at the same time they pay their GST return. This will reduce compliance, time and effort for small business owners and align their provisional tax payment to their cashflow.
“This move by the Government, Inland Revenue and other organisations means together the public-private partnership is helping make tangible changes to policies for the good of industry. This is a fantastic step in the right direction for small businesses,” says Rod.