10 hours ago
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."
