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2019 Tax Policy Scholarship Competition finalists

2019 Tax Policy Scholarship Competition finalists 1200 630 Lee Stace

A negative income tax coupled with a flat tax rate for individuals and the creation of a trusted taxpayer regime.

These are among the ideas judges will hear as part of the Tax Policy Scholarship Competition.

A tax on biogenic methane emissions and freshwater as well as reforming the R&D tax credit regime are the others options on the table.

Spark’s Nigel Jemson, PwC’s Michael Hansby, and the Deloitte duo of John Lohrentz and Shay Webster are this year’s finalists.

They are vying to win $10,000 prize money.

The four finalists’ proposals are an interesting mix of environmental, social assistance and behavioural messages, says Tax Policy Scholarship Competition judge and Tax Policy Charitable Trust chair John Shewan.

Photo: Tax Policy Scholarship Competition

Photo: Colin McDiarmid.

The ideas of the quartet

Jemson is pushing for the creation of a trusted taxpayer regime.

This will see businesses receive a 10 percent discounted tax rate by opting to regularly report financial information to IRD.

Anyone part of the scheme for three years or more will also have their annual tax return requirement removed.

A small business would be eligible for the scheme if they are using the accounting income method to pay provisional tax and operating a “predominantly cash-free” business.

As for Webster, he favours using tax to create a broad, universal welfare system to tackle inequality, reduce the cost of welfare and stimulate the economy.

He proposes doing this by implementing a negative income tax combined with a flat rate of 33 percent for individuals.

Under this, those earning less than $31,500 will receive a tax credit or a weekly or fortnightly cash payment from the Government.

Meanwhile, Lohrentz supports a progressive tax on biogenic methane emissions in the agriculture sector.

Revenue from the tax would go back into agricultural. That would be in the form of:

  • A fund to grant money to those changing land use, planting trees, retraining or implementing more efficient practices and technology.
  • An R&D tax credit exclusively for climate change-orientated R&D in the agriculture sector.

Not only that, but he also promotes a 40 percent R&D tax credit. This would be for taxpayers undertaking a core R&D activity that fosters ‘natural capital’ in New Zealand’s agriculture sector.

Lastly, Hansby recommends giving regional councils the power to impose tax on extracted freshwater to moderate consumption.

Additionally, they will retain 50 percent of the revenue the tax generates as part of this proposal.

While each council will be able to determine the tax rate, he suggests a base tax rate of two cents per thousand litres.

The next stage of the Tax Policy Scholarship Competition

The finalist will present to the judges in Wellington in November.

Shewan says their proposals have the potential to make a difference to New Zealand society.

Still, the judges will be considering other factors when making their final assessment. That’s because these ideas may also place additional pressure on the tax system or have unintentional consequences.

“The judging panel will be looking closely at issues such as complexity, economic impact, the potential for distortions and technical feasibility in judging the final submissions,” says Shewan.

As well as Shewan, the other judges on the panel are former Reserve Bank of New Zealand governor Alan Bollard, tax barrister David McLay, former Bell Gully tax partner Joanne Hodge and former IRD deputy commissioner Robin Oliver.

While the winner will collect $10,000, the runner-up will receive $4000 and the other two finalists $1000.

Tax Policy Scholarship Competition background

Every two years, the Tax Policy Charitable Trust invites young tax professionals with an interest in tax policy to make a submission.

Submissions for the Tax Policy Scholarship Competition must outline a significant reform to the New Zealand tax system.

It is open to those under the age of 35 working (or eligible to work) in New Zealand. Those in the public and private sector or academia can enter.

There were 14 entries this year.

“Several submissions focused on the use of tax to achieve social and environmental outcomes, and to incentivise taxpayers to behave in particular ways,” says Shewan.

This is the third Tax Policy Scholarship Competition.

Previous winners include Matt Woolley and Talia Smart (both 2017) and Caleb McConnell (2015).

About the Tax Policy Charitable Trust

Tax Management NZ founder Ian Kuperus is responsible for creating the Tax Policy Charitable Trust.

His aim is to support the continuation of leading tax policy research and thinking and inspire future tax policy leaders.

In addition to the Tax Policy Scholarship Competition, the trust also sponsors the visit of a leading tax expert to New Zealand.

This is to ensure New Zealand benefits from the best tax thinking from overseas.

Last year, it held an event with Sir Michael Cullen and other Tax Working Group members after the release of its draft report.

OECD’s David Bradbury meets with IRD, Treasury

OECD’s David Bradbury meets with IRD, Treasury 620 349 Lee Stace

The Tax Policy Scholarship Charitable Trust recently sponsored the visit by an OECD official who met with government officials to discuss the direction of tax policy changes around the world and how New Zealand might respond to these.

David Bradbury, head of the tax policy and statistics division for the Centre of Tax Policy and Administration at the OECD and a former Australian politician, was this year’s visiting lecturer.

As part of his trip, he engaged with officials from Inland Revenue and The Treasury to discuss such issues as capital gains tax, BEPS and the digital economy. He also held meetings with the Tax Working Group.

David also spoke to tax professionals at events held in Auckland, Wellington and Christchurch. The topic of his presentation was: The direction of global tax policy changes, how New Zealand sits and challenges for the future.

It was well received by attendees.

In between his various engagements, David was interviewed by several media outlets on the aforementioned tax issues:

Further information about David Bradbury

At the OECD’s Centre for Tax Policy and Administration, David leads a team of economists, lawyers and statisticians who are focused on providing internationally comparable revenue statistics and delivering high quality economic analysis and tax policy advice.

He served in the Australian Government as the Assistant Treasurer, Minister for Competition Policy and Consumer Affairs, Minister Assisting for Financial Services and Superannuation, and Minister Assisting for Deregulation before joining the OECD in 2014.

As a minister, David led the Australian Government’s contribution to the debate on BEPS and implemented key taxation reforms including the general anti-avoidance rule (Part IVA) and the modernisation of Australia’s transfer pricing laws.

About the Tax Policy Scholarships Charitable Trust

The Tax Policy Scholarships Charitable Trust was established by Ian Kuperus and Tax Management NZ to contribute to the future development of tax policy in New Zealand.

Previous visiting lecturers it has brought to New Zealand include Michael Keen, deputy director of the IMF’s Fiscal Affairs Department, and professor of economics and public policy at the University of Michigan, Joel Slemrod.

Matt Woolley and Talia Smart named joint winners of tax comp.

Matt Woolley and Talia Smart named joint winners of tax comp. 510 307 Lee Stace

Treasury’s Matt Woolley and Talia Smart from Inland Revenue (IRD) are the co-winners of tax policy competition run by the Tax Policy Scholarship Charitable Trust (TPSCT).

The pair impressed the heavyweight judging panel while presenting their respective proposals at Wellington’s Victoria University, receiving $7000 each for their efforts.

Woolley discussed a fully integrated tax system that attributes all company income to shareholders. Under that approach, businesses would pay tax on behalf of shareholders based on their marginal rates.

Smart’s proposal looked at removing the business income exemption for charities.

The other finalists were Chris Park (KPMG) and Nicholas Coyle (IRD).

Park’s proposal revisited the idea of a land tax, while Coyle’s presentation reconsidered the claw back of interest deductions. Both received $1000.

Presentations were judged by a panel comprising TPSCT chair and former PwC chair John Shewan, ex-Bell Gully tax partner Joanne Hodge, former IRD deputy commissioner Robin Oliver, Victoria University Business School dean Bob Buckle and ex-secretary of Treasury John Whitehead.

Competition background

Tax professionals under the age of 35 were invited by the TPSCT to submit proposals that outlined a significant reform of the tax system. Twenty-five entries were received.

The TPSCT was established in 2012 by Tax Management NZ and its founder Ian Kuperus to inspire the next generation of leaders in New Zealand tax policy and administration.

Minister of Revenue announces tax policy competition finalists

Minister of Revenue announces tax policy competition finalists 510 300 Taxpolicy

Minister of Revenue Judith Collins was on hand to announce the finalists for this year’s Tax Policy Competition.

They are Talia Smart and Nicholas Coyle (both from Inland Revenue), Treasury’s Matt Woolley, and PwC’s Chris Park.

The finalists for the competition, which has been organised by the Tax Policy Scholarship Charitable Trust (TPSCT), were announced during a live stream of events simultaneously held in Wellington and Auckland.

Smart’s proposal looked at removing the business income exemption for charities, while Coyle’s reconsidered the claw back of interest deductions. Woolley discussed full corporate-personal tax integration and Park revisited the idea of a land tax.

As well as Minister Collins, other notable attendees were Inland Revenue Commissioner Naomi Ferguson and TPSCT Chair and former PwC Chair John Shewan, who delivered the opening address.

The finalists will present their full proposals in front of a heavyweight panel of judges during the awards dinner in Wellington on 17 October.

Joining Shewan on the panel are ex-Bell Gully Tax Partner Joanne Hodge, former IRD Deputy Commissioner Robin Oliver, Victoria University Business School Dean Bob Buckle and ex-Secretary of Treasury John Whitehead.

The winner will receive $10,000, the runner-up $4000 and the other finalists $1000 each.

Late last year, the TPSCT invited tax professionals under the age of 35 working in the public and private sector or academia to submit progressive and innovative reform ideas for the New Zealand tax system.

Given 2017 is an election year, proposals had to outline a significant reform of the New Zealand tax system in terms of its bases, method of collection, interface with taxpayers, legal framework or structural amendment.

Twenty-five applications were received by the judges.

The TPSCT was established in 2012 by Tax Management NZ and its Founder Director Ian Kuperus. Its aim is to inspire the next generation of leaders in New Zealand tax policy and administration.

Joel Slemrod talks weird taxes of the past

Joel Slemrod talks weird taxes of the past 422 300 Taxpolicy

Taxes on beards, bachelors, wigs and windows.

As outlandish as these might sound, these taxes did exist at one point and were discussed recently by Robin Oliver Tax Policy Scholarships visiting lecturer and Professor of Business Economics and Public Policy at the University of Michigan’s Ross School of Business Joel Slemrod at a luncheon with a group of leading New Zealand tax professionals in Auckland.

The event, which was held at the Northern Club, was organised by the Tax Policy Scholarship Committee (TPSC).

Mr Slemrod – who was dubbed ‘The Rolling Stones’ of the tax world – talked about how farfetched taxes of the past provided lessons for tax policy today, especially how tax policy settings can drive certain behaviours.

The idea of his presentation was to highlight how the basic principles of taxation are hard to see when people are familiar with taxes or they are distracted by political rhetoric.

Attendees found his presentation to be entertaining and informative.

Mr Slemrod also spoke at Wellington’s Victoria University and the IFA Conference in Queenstown, and met with officials from Inland Revenue, Treasury and the minsters of finance and revenue during his visit to New Zealand.

About the TPSC

The TPSC was established by TMNZ and its founder director Ian Kuperus to encourage future tax policy leaders and support leading tax policy thinking in New Zealand.

The trust sponsors a leading international tax policy thinker to visit New Zealand to engage in debate and discussion, and a New Zealand tax professional to undertake research and study overseas.

Young tax guns to talk alternatives to CGT, GST on imports

Young tax guns to talk alternatives to CGT, GST on imports 453 300 Taxpolicy

Taxation of houses under a capital gains tax (CGT) and GST on imports are among the ideas four young tax professionals will showcase to respected tax leaders in Wellington in October.

Auckland trio Jeremy Beckham, Matthew Griffin and Peter North along with Wellington’s Caleb McConnell submitted proposals which outlined a significant reform of the New Zealand tax system as part of a competition run by the Tax Policy Scholarships Charitable Trust (TPSCT).

Each will present to, and field questions from, a heavyweight judging panel comprising the following:

  • Robin Oliver, former Inland Revenue Deputy Commissioner
  • John Shewan, TPSCT and former PricewaterhouseCoopers Chair
  • John Whitehead, former Secretary of Treasury
  • Oliver Hartwich, New Zealand Initiative Executive Director
  • Joanne Hodge, former Bell Gully Tax Partner.

As well as GST on imports and CGT, other ideas to be discussed at Victoria University on 8 October are a system where company tax losses can be purchased and sold, and a schedular tax base to promote savings and growth.

Shewan says judges were impressed with the calibre of the 14 proposals they received.

“It was great to see applicants thinking outside of the square and promoting policy ideas to tackle huge challenges such as the inability of traditional taxes to cope with the digital economy.

“Applications reflected a wide range of ideas, from growth-oriented and tax base protection initiatives to corrective taxes to deal with problems such as runaway Auckland house prices, environmental issues and disparities in regional economic and population growth.”

The winner will receive $10,000 and the other finalists $2000.

Tax professionals under the age of 35 working in the public and private sector or academia in New Zealand were eligible to enter the competition.

Proposals had to take into account future challenges facing the New Zealand tax system and detail how they could simplify tax and reduce compliance costs for taxpayers.

The TPSCT was established in 2012 by Tax Management New Zealand and its founder director Ian Kuperus to encourage future tax policy leaders and support leading tax policy thinking in New Zealand.

The finalists

Jeremy Beckham

Age: 27

Occupation: Senior tax consultant – Deloitte

Proposal: Schedular tax base to promote savings and growth

Matthew Griffin

Age: 28

Occupation: General manager – Hobby Co

Proposal: GST on imports using software and behavioural economics

Caleb McConnell

Age: 24

Occupation: Solicitor – Chapman Tripp

Proposal: Purchase and sale of company tax losses

Peter North

Age: 23*

Occupation: Tax consultant (transfer pricing) – Ernst & Young

Proposal: Different approach to the treatment of houses under a capital gains tax

*Turns 24 on 25 July.