Budget Highlights 2019
Wellbeing front and centre of Budget 2019
With the focus firmly on wellbeing measures, Budget 2019 made no new tax announcements.
The tax measures had already been revealed in the pre-Budget announcements:
- GST on telecommunications, and
- repeal of racing totaliser duty.
GST on telecommunications
The Government proposes to align the GST treatment of telecommunications services with the rules for remote services. This will mean the repeal of special rules applying to telecommunications services in the GST Act.
Although most consumers and telecom providers would not experience a change in GST treatment, the proposal would change how GST is levied on mobile roaming services. The GST treatment depends on the residency of the consumer, so that:
- outbound mobile roaming services to New Zealand residents overseas would be subject to GST at the standard rate of 15%, and
- inbound mobile roaming services provided to non-residents in New Zealand would no longer be subject to GST.
The changes are proposed to apply from 1 October 2020.
Repeal of racing totaliser duty
The racing totaliser duty (aka the betting levy) is to be phased out over a three-year period. The betting levy represents 4% of betting profits, which amounted to $13.9 million in 2018. This sum is to be redistributed to the racing codes and Sport New Zealand, with a proportion set aside to support the reduction of gambling harm.
Digital services tax signalled for 2020
The Government will release a discussion document exploring options for taxing the digital economy shortly. No details of the proposed digital services tax are given in the Budget, but the Prime Minister has indicated that a 2–3% tax on turnover is one of the templates being considered.
International Visitor Levy
The Government’s previously announced International Visitor Conservation and Tourism Levy (IVL) will apply from 1 July 2019. Most international visitors entering New Zealand will be charged a levy of $35 via a new electronic form known as the Electronic Travel Authority (ETA).