The Missing Billions

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3867 posts

Uber Geek
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Reply # 705868 24-Oct-2012 19:16

Litespeed:
gundar:
Litespeed: Clamp down on the under-the-table "cashies" from tradesmen for a start.

If this happened, I would have to quit and go on the benefit or you would have to pay 30-50% more for my work so that I can pay more tax.

Still okay with that?

Yup. At least it would be legit.

A higher tax take should then filter though to meaning more income to pay and also lower tax as well.

I account for all my jobs, why shouldn't everyone?

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mattwnz

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Reply # 705869 24-Oct-2012 19:19

Litespeed:
gundar:
Litespeed: Clamp down on the under-the-table "cashies" from tradesmen for a start.

If this happened, I would have to quit and go on the benefit or you would have to pay 30-50% more for my work so that I can pay more tax.

Still okay with that?

Yup. At least it would be legit.

Not only that , but you also run the risk of getting caught and having to pay heaps in taxes and fines. I wouldn't have thought it would be worth the risk, especially as the gov are putting more money into this area. I wold have thought it would be a matter of when not if.

Litespeed

90 posts

Master Geek

Reply # 705994 24-Oct-2012 22:03

DonGould:
Litespeed:
gundar:
Litespeed: Clamp down on the under-the-table "cashies" from tradesmen for a start.

If this happened, I would have to quit and go on the benefit or you would have to pay 30-50% more for my work so that I can pay more tax.

Still okay with that?

Yup. At least it would be legit.

A higher tax take should then filter though to meaning more income to pay and also lower tax as well.

I account for all my jobs, why shouldn't everyone?

Exactly.

To illustrate my point, I know a tradesman who sometimes does 10k+ cashies.

DonGould

3867 posts

Uber Geek
+1 received by user: 158

Reply # 706006 24-Oct-2012 22:14

Litespeed:
To illustrate my point, I know a tradesman who sometimes does 10k+ cashies.

Yip, and the cynic in me says the customers are govt employees with good pay packets investing in their homes or rentals wanting to get a bit of better value but have plenty of cash for these gigs but no care for where the cash is coming from because they figure they pay enough PAYE each week already.... is there any wonder we borrow $200m a week to keep up with our current spending?

...oh and ya, I'll fully accept any suggesting I know bugger all about how the countries books really work :)

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Brendan

698 posts

Ultimate Geek
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Reply # 706041 25-Oct-2012 01:09

TinyTim:
Brendan:
I said CHURCHES not "other community organisations". Please stick to what I actually said.

Churches are running many community services - e.g. Presbyterian Support, Salvation Army, Anglican Care, foodbanks etc

And you will find that the the government has contracted out so many of its social services to these groups (because it can't afford to provide them itself) that society as a whole become totally dependent on them.

Nothing that could not be reversed, and I'd argue SHOULD be reversed.

The social underpinnings of our society are under attack from vested interests and ideologues.

It would be simply disastrous if they suddenly stopped (or reduced) providing the services that they do.

Oh, I think we don't need to take a binary either/or attitude.

We can replace them with a more neutral, secular alternative that would also free people from covert or overt religious behavior when they are vulnerable.

MikeB4

Departed
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Reply # 706076 25-Oct-2012 07:46

Tax avoidance is using legal means to reduce tax liability, eg correctly applying depreciation to write down profit and thus reducing tax liability.

Tax evasion is using illegal means to reduce chargeable income and hiding chargeable income to escape payment of tax liability.

The former is legal, the latter is illegal.

Mike
Retired IT Manager.
The views stated in my posts are my personal views and not that of any other organisation.

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John2010

532 posts

Ultimate Geek
+1 received by user: 28

Reply # 706109 25-Oct-2012 09:23

Brendan: ...Nothing that could not be reversed, and I'd argue SHOULD be reversed.

The social underpinnings of our society are under attack from vested interests and ideologues...

..We can replace them with a more neutral, secular alternative that would also free people from covert or overt religious behavior when they are vulnerable.

"Gosateizm" is the word you have in mind for your alternative to religion, isn't it?

After all religion, as you are alluding to, is the opiate of the people and it is exploited by capitalists as a tool for stupifying and so enabling their taking advantage of the working classes.

gzt

8887 posts

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Reply # 706138 25-Oct-2012 10:28

KiwiNZ: Tax avoidance is using legal means to reduce tax liability, eg correctly applying depreciation to write down profit and thus reducing tax liability.

Tax evasion is using illegal means to reduce chargeable income and hiding chargeable income to escape payment of tax liability.

The former is legal, the latter is illegal.

In an NZ context I think you are intending to contrast tax evasion with tax minimisation.

In an NZ context avoidance actively seeking to avoid paying the correct amount of tax. Those strategies are often clarified as illegal by the judiciary and avoiders are told (at the least) to pay up.

http://www.ird.govt.nz/aboutir/gettingitright/tax-schemes-atp/tax-avoidance/

John2010

532 posts

Ultimate Geek
+1 received by user: 28

Reply # 706168 25-Oct-2012 10:56

gzt:...In an NZ context I think you are intending to contrast tax evasion with tax minimisation.

In an NZ context avoidance actively seeking to avoid paying the correct amount of tax. Those strategies are often clarified as illegal by the judiciary and avoiders are told (at the least) to pay up...

The non use of the term "evasion" in the tax act leads, I think, to a great deal of confusion, even within IRD itself when, for example, they had in a flowchart in their late last year statement on avoidance which was their endeavour to clarify the situation as they see it to be:

"Is the tax avoidance more than merely incidental to a non-tax purpose? -> If no -> This is not a tax avoidance arrangement"

So that appears to mean that you can legally avoid tax as long as it is not a "tax avoidance arrangement"

which is the term used in the Act, so if it is an "avoidance arrangement" and not just "avoidance" it is technically "evasion".

As usual one side, the revenue, applies mental gymnastics to try to stop legal avoidance, while the taxpayers apply mental gymnastics to avoid paying taxes they are not legally required to pay.

crackrdbycracku

1168 posts

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Reply # 706277 25-Oct-2012 13:50

John2010:
gzt:...In an NZ context I think you are intending to contrast tax evasion with tax minimisation.

In an NZ context avoidance actively seeking to avoid paying the correct amount of tax. Those strategies are often clarified as illegal by the judiciary and avoiders are told (at the least) to pay up...

As usual one side, the revenue, applies mental gymnastics to try to stop legal avoidance, while the taxpayers apply mental gymnastics to avoid paying taxes they are not legally required to pay.

Tax law is one of those laws where enforcement is always going to be behind the curve.

In a perfect world people would accept that paying tax enables you to live in a country worth living in.

If you avoid paying tax, legally or illegally, you are contributing to about every social ill there is. But until we all see paying tax in this way people will try to avoid paying.

Didn't anybody tell you I was a hacker?

mattwnz

12949 posts

Uber Geek
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Reply # 706292 25-Oct-2012 14:04

Interesting story here too. Sounds like another $2.5billion borrowed by NZ

http://www.interest.co.nz/bonds/61698/govts-debt-manager-sells-nz25-bln-worth-13-year-inflation-indexed-bonds-196

mattwnz

12949 posts

Uber Geek
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Reply # 706320 25-Oct-2012 15:23

Here's another good article.

This was an interesting extract from that article

"Google, for example, made losses for tax purposes in New Zealand in the last two years, despite advertising industry estimates that it made revenues from New Zealand of over NZ$100 million last year. Last year it paid just NZ$109,000 in tax in New Zealand."

http://www.interest.co.nz/opinion/61638/how-much-freedom-should-individuals-or-companies-have-change-their-affairs-response-ta

gzt

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Reply # 706323 25-Oct-2012 15:27

Pasting a url between tags is not hard.

DonGould

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Reply # 706331 25-Oct-2012 15:44

gzt: Pasting a url between tags is not hard.

+1 and makes access via a smart device so much easier!

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John2010

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Ultimate Geek
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Reply # 706333 25-Oct-2012 16:03

crackrdbycracku:In a perfect world people would accept that paying tax enables you to live in a country worth living in.

If you avoid paying tax, legally or illegally, you are contributing to about every social ill there is. But until we all see paying tax in this way people will try to avoid paying.

But, of course it depends how much tax individuals and companies think they should be paying and what they regard as being fair. Also how inefficient the government is in spending it. In most cases no one is happy; those who pay little tax think those who pay more tax than them are not paying enough is the usual complaint, and very, very few complaining because they want to pay more tax themselves.

I worked a bit for a very modern wealthy country (not from natural assets, no imported cheap labour, etc just clever) with most being very prosperous by our standards, and they had no company tax, no capital gains taxes, etc and there was no personal tax. Instead, companies paid a percentage of their payroll as tax, approximately 13% (varied a little about that according to the size of the company). Most of the balance was made up by sales taxes (not GST, so in effect that indirect tax not much different to here) and the result that the internal economy was dynamic.

This concept would, of course, send all our local lefties into rages if this was ever proposed here as they would hate the thought of companies not paying taxes and, in effect, only one tax rate, even regardless if the result was to be that doing so would make us much more prosperous (I can see Brendan having an apoplectic fit already

). But it did mean that there was no such thing as a cash economy, no tax driven disincentives to work or to have own interests on the side which here might get you into trouble with IRD if they saw it as being more than a hobby, very little opportunity for evasion, etc, and all getting by with all paying less tax than here.

But our colective hobbit like wealth and private enterprise despising nature is such that we will be stuck with an economy that is not dynamic and prosperous and so will always be also rans with more poverty than we should have.

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