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Brilliant policy

Written By: - Date published: 1:27 pm, March 2nd, 2013 - 47 comments
Categories: Satire, tax - Tags: , ,

I’ve got to stay that I stand in awe of this latest tax policy suggestion from the IRD. Simple, fair, easy to implement, it will be wildly popular. I think the Nats should adopt it at once. They’d sew up the 2014 election right here:

Personal use tax looms for laptops

Employees may lose their work smartphones, tablets and laptops if bosses are forced to pay tax on personal use of the devices under new Inland Revenue Department proposals. …

The IRD wants to tax payments employers make for their workers’ communication costs such as smartphone data and calling plans and home broadband services.

The tax would apply “when there is a mixed work and private expense that is more than incidental private use”, the department said in a recent discussion document. …

What could possibly go wrong?

47 comments on “Brilliant policy”

  1. tc 1

    Well they’ve got to replace the revenue given up by the Ohairy one’s gift duty abolishment.

    Nice to see they’ve got the A team onto it, genius.

  2. infused 2

    Do we need to start writing down minutes of use in private time vs business time?

    I’m sure it would go the way of FBT… that no one pays

  3. QoT 3

    Can anyone find a link to the actual discussion document? Forgive me if I don’t immediately believe everything the Herald and EMA have to say about tax …

  4. Treetop 4

    What could possibly go wrong?

    Being charged a penalty payment.

  5. I’m struggling to see what’s so nuts about this, as long as you accept fringe benefit tax generally. A smartphone that has personal use as well as work seems analogous to a company car to me. Opposing this doesn’t seem particularly left wing or principled to me.

    • infused 5.1

      It would be a cluster fuck of epic proportions.

      • Colonial Viper 5.1.1

        but its a clever idea in theory. Right?

        • infused 5.1.1.1

          Well I don’t think it’s clever really. Like my post right below, it would claw back such little money and cost a ton to administer.

          Using cars as an example, doing the sums is quite simple. In business though, how many laptops, phones etc do you have? Who uses them and for what purpose?

          I can see what they are trying to do, but I don’t think much thought has been put in to it.

        • infused 5.1.1.2

          Thinking about it though, it could be clever if they came up with a very easy way of calculating it. But there are so many devices, for so many different things, I can’t see that.

  6. handle 6

    Maybe companies could no longer require their staff to be on-call electronically in their own time?

  7. Rogue Trooper 7

    Shoe-phone?

  8. AsleepWhileWalking 8

    What could possibly go wrong?

    * The line between social networking presence for business and personal use is practically invisible and any use of social media could be considered networking for business purposes.

    * It will add a level of complexity that will discourage small/medium business use of technology, something that should be embraced as our businesses compete globally. The tax will immediately discourage innovation.

    * Environmental impact of additional electronic waste which I’ve mentioned before will increase as personal use is no longer possible on a company laptop.

    * Can’t we just keep it simple? If I wanted endless regulation I’d move to the US.

    * IRD may have difficulty keeping up with technological changes. For example they tax laptops, but I’m not using a laptop, it’s a notebook (the distinction is that a notebook has no CD drive just USB). It’s not a smartphone, it’s a pair of google glasses/a weird watch gadget thing. I’m not phoning, I’m using Skype. Oh, look! Some nice open source software that allows me to get around this tax crap… bring in the tax and this is sure to follow : )

    * There is a wide variation of use which will make this difficult to tax. Eg, using a car and keeping a logbook for three months won’t translate into the use of a computer because of spikes in use during periods of high workloads/deadlines. In other words it would have to be constantly monitored in order to be accurate. This is possible using something like http://www.tracklabor.com but really is it practical on a National scale?

    * I open multiple tabs (apparently the theoretical limit is 32K tabs in Firefox – woohoo!) on my laptop. One/several are for personal use (eg IM, streaming music etc). Am I using the laptop for business use because I am in fact WORKING or personal use because I am in fact waiting for a reply during my working day?
    I use multiple browsers while working and using for personal stuff so am I working during multiple browser use or not?

    Nope, the better idea is to make sure Peter Dunne is voted out of a job next election and replace him with a leftee.

    • handle 8.1

      Replace him with a shrub (deductable of course).

    • Mike S 8.2

      Also nearly impossible for ird to prove whether say a broadband connection has been used for personal use.

      If they need to raise more taxes they should be looking at removing Key’s tax cuts and increasing the minimum wage by a lot more than the 25c just announced. 25c is taking the piss out of hard working minimum wage earners. Or a financial transaction tax would be far simpler to administer, far less painful to far less people and would raise shitloads more taxes.

    • Treetop 8.3

      Send Dunne to work at Transmission Gully, he can operate the stop go sign which may be the most useful thing he could do for his electorate since November 2008.

  9. Raymond a Francis 9

    Interesting to see who has been using a tax free computer/smart phone coming out grizzling
    Pay your fair whack and time to reel in the real fats fats who dodge tax as well as these sobs

  10. Colonial Viper 10

    Given that current tax avoidance and evasion totals several billion dollars a year, how much of that will this latest IRD recommendation claw back?

    • Draco T Bastard 10.1

      I think the better question is: How much will it cost?

      • Colonial Viper 10.1.1

        I was always trained to look for the big wins, the easy sweet low hanging fruit. This does not seem like it.

    • infused 10.2

      Fuck all I think. Since the price of the devices are so low. It works out well on vehicles because they cost a lot. Laptops, ipads etc don’t.

    • tc 10.3

      Nailed it CV, a vacuous idea in terms of its effectiveness whilst billions are evaded by the large corporates with the expensive legal/tax teams and all those connections.

  11. tamati 11

    Fair enough, if a banker earns $100,000 a year why shouldn’t he/she pay tax on their free phone or ipad? Let’s face it 90% of company internet use is porn or facebook!

    • infused 11.1

      If a phone costs say $500, and he makes say $100 of calls per month, what’s the tax on that going to be?

      I can’t see that stacking up for the effort required in administering it.

      Each month I get a penalty added for GST, which is then removed because IRD is so slow at processing GST payments. What’s this going to do?

  12. tc 12

    I recall a senior tax adviser many years ago stating the importance in terms of minimising corporate exposure that they be involved in everything.

    Go ahead make this change, these jokers are way ahead of you, looks like someone wants to look busy. Go ahead, waste their day.

  13. Tony P 13

    As if schools didn’t have enough to deal with with Novapay. Nearly every teacher in NZ has a laptop provided funded by both the MOE and the School. Lease deal has MOE paying one third and school or teacher paying two thirds. Sometimes they may be used in a personal manner. Who pays the FBT? The MOE or the school or do they divide it. Not sure our financial person would want to deal with this.

  14. David Cunliffe 14

    What could go wrong? Ummm , privacy concerns, red tape, complexity, lack of revenue to justify the nonsense overhead costs…I will be digging in to this issue and blogging about it during the week.

  15. David Cunliffe 15

    What could go wrong? Ummm , privacy concerns, red tape, complexity, IRD’s creaking computer system, lack of revenue to justify the nonsense overhead costs…

    Good post thanks Anthony, and useful comment by@asleep above.

    I will be digging in to this issue and blogging about it during the week.

    A last thought – how come National is happy to be so intrusive at the level of individual phones but so hands off with major league corporate tax avoidance?

    • Colonial Viper 15.1

      Good stuff David. I wonder if it’s part of a larger spin to look tough on tax loopholes while doing nothing which will make a real difference to government revenues. Look out for a tax on work provided steel caps next – you know, for the private use portion of the day where you might wear your shoes out of the factory to get lunch or travel home.

    • insider 15.2

      The left should support this because it could promote work life balance if companies only hand out phones to those who really need them. I think the lessening delineation between work and leisure is an important issue in the wireless world.

      If I have a company phone, sure I get near free use but I am always on call and always have to carry it. Work is just a text or voicemail away. It’s a major personal life impediment. I can safely ignore them if they come in on my own phone without any lingering sense of responsibility.

      • Colonial Viper 15.2.1

        But will companies really agree to stop contacting workers after hours? VW in Germany has done so.

        http://www.bbc.co.uk/news/technology-16314901

        But improving work-life balance is not the point of this taxation policy anyway.

        • insider 15.2.1.1

          I know it is not the point of the policy, just pointing out a potential -if limited – upside.

          Caller display is a great tool for ignoring those you don’t want to hear from…

        • Skinny 15.2.1.2

          I agree it’s a sideshow to ‘take eyes off the prize’ of cramping down on wealthy tax evaders. Years ago, and probably still today big business   head hunted IRD law makers. Who better to find loop holes than those who wrote the complex rules. The IRD could start with those rich pricks that are robbing honest  hardworking tax payers through working for families & Trust structures.       

      • handle 15.2.2

        It is what I was getting at above at #6.

    • KJT 15.3

      National. the party of tax and spend.

  16. Treetop 16

    Even when it comes to the cost of car registration compared to tractor registration (which is cheaper) keeping track of those ripping off the system is not being detected because the labels are similar.

    Go figure.

  17. Herodotus 17

    From memory – could not find e link in the ird, but companies can give to employees$50 of goods per quarter before tax,FBI etc is applicable.
    Also if you have a pricing plan of so many free minutes, texts, Internet usage there is no tax it would only apply to any costs incurred above the package.
    So I would imagine there is only a headline here and no income associated with this.
    Perhaps the ird could spend a little time ( it may even enable the govt to collect tax) and spend some time and effort into trading of property. But as we have now taxed the paper and milk boys and girls they must be running out of who can be taxed and what activities.

  18. Skinny 18

    Well I know one EMA lawyer who won’t be happy about this, she was running a home based business from where we lived ( she got the bullet not long after she crossed to the darkside). Suck it up girl ya Bosses don’t have a clue!

  19. Matthew 19

    I have a work laptop. I dont make any money with it when I use it at home. How will I/why should I be taxed on it? (genuine question)

    • felixviper 19.1

      Why?
      According to the fringe benefit principle, your private use of a work laptop can be considered to be part of your remuneration package.

      How?
      I presume the value of the laptop would be divided into a work portion and a private portion depending on how much it’s used for each purpose, and you would be taxed on the private portion spread over the expected lifetime of the laptop as if it were income.

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