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Compliance and audit reviews
From mandates, best practice procedures or accreditations, to simply gaining peace of mind, our technical and industry experts have you covered.
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External audit
Strengthen business and stakeholder confidence with professionally verified results and insights.
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Financial reporting advisory
Deep expertise to help you navigate New Zealand’s constantly evolving regulatory environment.
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Corporate tax
Identify tax issues, risks and opportunities in your organisation, and implement strategies to improve your bottom line.
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Indirect tax
Stay on top of the indirect taxes that can impact your business at any given time.
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Individual tax
Preparing today to help you invest in tomorrow.
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Private business tax structuring
Find the best tax structure for your business.
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Tax disputes
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Research & development
R&D tax incentives are often underused and misunderstood – is your business maximising opportunities for making claims?
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Management reporting
You’re doing well, but could you be doing even better? Discover the power of management reporting.
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Financial reporting advisory
Deep expertise to help you navigate New Zealand’s constantly evolving regulatory environment.
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Succession planning
When it comes to a business strategy that’s as important as succession planning, you can’t afford to leave things to chance.
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Trust management
Fresh perspectives, practical solutions and flexible support for trusts and estate planning.
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Forecasting and budgeting
Prepare for every likely situation with robust budgeting and forecasting models.
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Outsourced accounting services
An extension of your team when you need us, so you can focus your time, energy and passion on your business.
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Setting up in New Zealand
Looking to set up a business in New Zealand? You’ve come to the right place.
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Policy reviews & development
Turn your risks into strengths with tailored policies that protect, guide and empower your business.
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Performance improvement
Every business has untapped potential. Unlock yours.
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Successfully execute mission-critical changes to your organisation.
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Make a choice about your vision and purpose, where you will play and how you will win – now and into the future.
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Risk
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Cloud services
Leverage the cloud to keep your data safe, operate more efficiently, reduce costs and create a better experience for your employees and clients.
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Use your data to make better business decisions.
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IT assurance
Are your IT systems reliable, safe and compliant?
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Cyber resilience
As the benefits technology can deliver to your business increases, so too do the opportunities for cybercriminals.
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Virtual asset advisory
Helping you navigate the world of virtual currencies and decentralised financial systems.
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Virtual CSO
Security leadership and expertise when you need it.
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Debt advisory
Raise, refinance, restructure or manage debt to achieve the optimal funding structure for your organisation.
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Financial modelling
Understand the impact of your decisions before you make them.
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Raising finance
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Business valuations
Valuable decisions require valued insights.
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Complex and international services
Navigate the complexities of multi-jurisdictional insolvencies.
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Achieve fair and orderly outcomes if your business – or part of it - is facing insolvency.
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Independent business review
Is your business viable today? Will it be viable tomorrow? Give your business a health check to find out.
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Business valuations
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Forensic accounting & dispute advisory
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Expert witness
Our expert witnesses analyse, interpret, summarise and present complex financial and business-related issues which are understandable and properly supported.
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Investigation services
A fast and customised response when misconduct occurs in your business.
Maintaining tax integrity
For any tax system to work effectively, a number of principles need to be present. The system must be simple and efficient, equitable, neutral, and able to generate adequate revenue.
The key focus in our current tax system has been on adequacy. But one has to wonder, will the Government be able to generate enough revenue from the current tax collection to fund its expenditure programme and bring our finances in line to meet the surplus target by 2014/15?
The simplest way to increase a government’s revenue is to increase taxpayer’s incomes: the more you earn, the more the government earns through taxation. However, there aren’t any direct actions a government can take to achieve this. The most it can do is pull a range of levers in the economy and hope (or pray) this has the right effect.
The alternative is direct intervention by determining new tax rules and ensuring they are complied with through strict enforcement. However, it’s generally accepted that any major revamp of the New Zealand tax system is off the agenda for this Budget. Instead, there has been a tinkering around the edges of the current tax policy and legislation.
New Zealand relies on a self-assessment regime to assess any changes to tax policy and proposals must go through a Generic Tax Policy Process, where consultation occurs prior to the enactment of any amendments. This is to ensure that taxpayers have confidence in the system and are happy to pay what is expected.
Unfortunately, recent forays to tweak the rules, namely the proposals to tax carparks and work related tools such as computers and cellphones, have resulted in a decline in the general public’s confidence in the integrity of our tax system.
The Government has backed down from the carpark tax and recent public statements from the Prime Minister have hinted that the proposed changes to the taxation of work tools look set for the same fate. The question remaining is, how did the Government think these proposals would ever achieve sound taxation outcomes?
These proposals were put forward on the principle of equity. The argument was, where a private benefit arises, a tax consequence should result. In the case of carparks, why should an employee obtain a carpark for free? However, it seems a step has been missed in the appropriate assessment of other principles.
Both proposals failed to meet the efficiency criteria. The calculations were complex, the principles muddied and compromises were made to try and make them work.
Their effect would not be neutrality as behaviours would change to make life simpler and complexities would be avoided by wholly withdrawing the offending expenditure.
Conversely, while the proposals sought to remedy the inequity of private expenditure, the equity principle also became offended, as the attempt to make things simpler meant tax would actually be paid on a business element as a compromise. It’s like the analogy of using a sledgehammer to crack a nut. While there may be some private benefits to these tax tweaks, they are insignificant in the bigger picture. And the negative perceptions created and additional compliance costs incurred in remedying these minor issues demonstrate they are not worth pursuing.
The increased use of work tools will also be a vital link to achieving an increase in this country’s productivity and effectiveness – a key Government concern. Businesses are using cellphones, smart phones and computers to respond quicker to customers, obtain market information and increase the efficiency of operations through various software applications.
The delineation between what is work and what is private is quickly becoming blurred. People are now available 24/7, operating outside their current time zone in an increasingly international marketplace.
Technology is certain to help drive the productivity gains this country so desperately needs, and in turn, drive the revenue the Government so desperately needs. Developing tax policy that rights some minor wrongs, collects a little revenue, but fundamentally changes the behaviours of employers and employees at the cost of productivity gains seems counter-intuitive.
Instead, a connection needs to be made between tax policy and business growth, and innovation and development. Then we may see the integrity of the tax system increase and the development of a more productive economy.
Further enquiries, please contact:
Greg Thompson
Grant Thornton Partner, Tax and Privately Held Business
T +64 4 495 3775
E greg.thompson@nz.gt.com