Latest news with #IRD
Scoop
5 days ago
- Business
- Scoop
Feds Call On Minister Watts To Rule Out Yet Another Tax
Federated Farmers is calling on the Revenue Minister to rule out yet another tax, this time a controversial Inland Revenue proposal hitting the not-for-profit sector. Under the proposal, organisations like Federated Farmers would be taxed on their membership subscription income for the first time. "We're calling on Simon Watts to move quickly and categorically take this off the table," Federated Farmers board member Richard McIntyre says. "This is not a routine tax consultation - this is a significant new interpretation that overturns 20 years of settled practice." Ideally, Inland Revenue would withdraw its draft interpretation but, failing that, the Minister must step in, McIntyre says. "This isn't a minor tweak - it's a fundamental shift in how the Inland Revenue Department (IRD) interprets the law. "It would have serious consequences for New Zealand's not-for-profit sector." Under current practice, not-for-profits structured as mutual associations - organisations set up to serve their members rather than make a profit - aren't taxed on income they receive from members. This principle, known as mutuality, is based on the idea that a group of people cannot make profit from dealing with themselves. However, IRD is proposing that if a not-for-profit is constitutionally prohibited from distributing profits to members, as most are, its member income should be taxed. "This would pull the rug out from under about 9000 not-for profits, advocacy groups, professional associations, unions, community organisations, and political parties who rely on membership fees to fund their operations," McIntyre says. "This is not just about Federated Farmers - it's sector-wide and is creating huge concern." The IRD's draft relies heavily on an Australian legal precedent - the Coleambally Irrigation case - which found mutuality does not apply when there is a legal bar on profit distribution. But Federated Farmers argues this is a poor precedent to import into New Zealand, noting that Australia's Parliament had to step in and reverse it with legislation after significant backlash. New Zealand's not-for-profit framework is different - but the harm from adopting this interpretation would create exactly the same confusion and harm, McIntyre says. Federated Farmers' submission urges the IRD Commissioner to withdraw the proposal and reaffirm the non-taxable status of genuine mutual income. "Ultimately, this is now a political question. The Government cannot allow the Inland Revenue to unilaterally rewrite tax policy that affects thousands of organisations," McIntyre says. "This is why the Minister needs to rule this out publicly. Tax policy decisions of this magnitude belong with elected representatives, not faceless tax officials in Wellington." Federated Farmers has submitted on this consultation draft. The submission questions why IRD is pursuing the change now, after more than 20 years of consistent guidance and practice and ecosystem has been allowed to flourish under the existing rules. "After two decades of stability, we have to ask: why now? This has the hallmarks of a desperate revenue grab dressed up as a legal interpretation," McIntyre says. "That's why the Minister needs to make it clear this won't proceed." Federated Farmers is not alone in its concerns. "We're hearing from a growing coalition of not-for-profits across the country, who are just as alarmed as us about the proposed change and its implications," McIntyre says. "From unions to professional bodies to political parties, the feedback is unanimous: this proposal would be devastating. "The mutuality principle has served our country well for decades, and it should be preserved." Federated Farmers' submission concludes with a stark warning: if the Commissioner proceeds with the reinterpretation, it will become a political issue - one that Ministers and MPs will need to address urgently. "The public deserve to know where the Government stands on this. We're calling on Minister Watts to give that clarity now," McIntyre says. The full submission is available here ( and Federated Farmers will continue to engage with the Government, other affected organisations, and the wider public as the consultation process unfolds.
Scoop
20-06-2025
- Business
- Scoop
PM's Intervention To Kill Simon Watts' Ute Tax 2.0 Welcomed By Taxpayers
The Taxpayers' Union is welcoming the Prime Minister's intervention to rule out the Inland Revenue Department's proposal to apply Fringe Benefit Tax (FBT) to all utes worth $80,000 or more and other work vehicles — a plan directed by Climate Change and Revenue Minister Simon Watts. In response to media comment issued by the Prime Minister's Office last night, Taxpayers' Union Executive Director Jordan Williams said: 'Simon Watts was pushing a new Ute Tax, without his Cabinet colleagues or the public even knowing. Had it gone ahead, farmers and tradies would have been slammed with thousands of dollars in additional tax each year – not just once like Labour's Ute Tax, but every year.' 'The documents are crystal clear. IRD was instructed by Minister Watts to proceed with and consult with the tax industry on the implementation of a new FBT regime that would capture work vehicles, regardless of how they're actually used. This was a massive tax hike by stealth.' "As far as we can tell, the Revenue Minister didn't consult with any taxpayer, business, or farming groups, despite work having been done on this for nearly a year. Had he bothered to engage, the unfairness and political risk would have been obvious. That lapse saw the Government facing backlash because it was tax boffins who blew the whistle and it took everyone by surprise. Minister Watts should learn the lesson." 'Within hours of our campaign launch yesterday, the National Party was in damage control. Within six hours, the PM's team overruled Watts and confirmed the policy would not proceed.' The Taxpayers' Union yesterday revealed documents showing that IRD had been working on changes to remove the logbook exemption for work vehicles and impose FBT on the assumed private use of double cab utes. According to IRD's own estimates, the tax grab would have cost farmers, tradies and other ute owners $100 million per year. 'We give credit to the Prime Minister and his office for stepping in quickly and pulling the handbreak.' says Mr Williams. 'This is a clear win for taxpayers and proof that grassroots pressure works. We thank the thousands of Kiwis who used our online tool to email National MPs and demand the Ute Tax 2.0 be scrapped."
Otago Daily Times
17-06-2025
- Business
- Otago Daily Times
North Otago organic vege grower in liquidation
A North Otago organic vegetable growing business, recently approached to appear on Country Calendar , has gone into voluntary liquidation owing more than $1million, while a subsidiary company owes more than $300,000. Organic Solutions, which traded as Oamaru Organics, is 53.45% owned by James Porteous — who is also the sole director — and Australian-based Lanson International Holdings Pty Ltd (46.55%). Touted as the largest organic market garden in the South Island, it sold vegetables both at a roadside stall at Totara and through the Otago Farmers Market. In a statement, Mr Porteous said the farm had "long struggled with chronic overstaffing", which significantly increased its financial burden and led to an accumulation of debt with the IRD. He said he stepped in to directly manage farm operations in August, reducing staff numbers from nine to one and introducing mechanisation. He said the farm became compliant with all ongoing tax obligations and began rapidly repaying historic tax arrears. Per-hectare revenue increased 39% and he proposed a "realistic" repayment plan, which was declined by the IRD. The company would continue to operate and supply customers to the best of its ability throughout the farm sale process, he said. Incorporated in 2014, it originally owned Thai restaurants around the South Island and bought the 23ha farm — one of its main suppliers — for $1.7m in 2019 to maintain supply. The deal was later found to have breached the Overseas Investment Act because Lanson International Holdings — whose majority shareholder was Mr Porteous' friend Marc Lanson — owned more than 46%. The rules stated Australians could not have more than a 25% share of any purchase of New Zealand land bigger than 5ha without gaining consent first. Organic Solutions was fined $20,000 and retrospective consent had to be sought. In his first report, liquidator Brenton Hunt, of Insolvency Matters, said the majority of the restaurants were closed due to the outcome of the Covid-19 restrictions. According to Mr Porteous, the business had struggled to be economic for some time. Inland Revenue payments had fallen behind and the IRD had begun recovery action. The last annual accounts completed for the company were in March 2022. Plant and equipment and motor vehicles were to be collected and sold and there was finance owing on vehicles, Mr Hunt said. The land and buildings were also to be listed and sold (first mortgage owing). Under preferential creditors, staff holiday pay was estimated at $10,000 and GST and PAYE were estimated at $900,000. Unsecured creditors were estimated to be owed $1m and the total estimated shortfall to all creditors was estimated at $1,279,500.
Business Standard
17-06-2025
- Business
- Business Standard
Reserve Bank of India releases fresh set of draft regulations for Rupee Interest Rate Derivatives
The Reserve Bank of India (RBI) yesterday released a fresh set of draft regulations aimed at updating the rules for Rupee Interest Rate Derivatives (IRD), in a move designed to bring the regulatory framework in line with evolving market practices and increased participation from non-resident entities. A comprehensive review of the IRD Directions was undertaken, and the draft directions have been prepared to align it with the market and other related developments, the RBI said while releasing the Draft Master Direction, Reserve Bank of India (Rupee Interest Rate Derivatives) Directions, 2025. The RBI has invited feedback from banks, market participants, and other interested parties on the draft by 7 July 2025.
Business Standard
17-06-2025
- Business
- Business Standard
RBI issues draft norms on rupee interest rate derivatives
The Reserve Bank of India issued draft regulations for Rupee Interest Rate Derivatives to align the extant regulatory framework with the market and other related developments. The extant regulatory framework for Rupee Interest Rate Derivatives (IRD) was issued in June 2019. Since then, there have been several new developments in the market, including the emergence of new products as well as the participation of non-residents in the market. Accordingly, a comprehensive review of the IRD Directions was undertaken, and the draft Directions have been prepared to align it with the market and other related developments, RBI stated. The reporting requirements under the Directions have also been rationalised to reduce compliance burden. Separately, a requirement for reporting of IRD transactions undertaken globally is proposed to be introduced with a view to enhancing transparency in the Rupee IRD market, the central bank noted.
