The Student Loan Scheme (Repayment Bonus) Amendment Bill provides a 10% bonus to those who make voluntary repayments on their student loans of $500 or more in a tax year from 1 April 2009.
All borrowers will be eligible for the bonus provided that they have met their student loan obligations for the year and also have a loan balance of $550 or more at the beginning of the tax year in which the voluntary payments are being made.
The bonus will be credited to the borrower’s student loan account at the end of the tax year.
CCH Updater – 3 June 2009
Budget 2009 tax measures announced that
Personal tax cuts that were due to take effect on 1 April 2010 and 1 April 2011 are to be delayed to prevent further increases in government debt. The tax cuts that came into effect on 1 April 2009 remain unchanged.
The associated increase of $5 per week in the independent earner tax credit, which was to have taken effect from 1 April 2010, is to be cancelled.
The KiwiSaver mortgage diversion facility is to be closed to new applicants from 1 June 2009, but will remain available to existing participants.
Mileage rate for motor vehicle expenditure
The Inland Revenue Department has released Operational Statement 09/01: Commissioner's statement of a mileage for expenditure incurred for the business use of a motor vehicle.
Under s DE 3 of the Income Tax Act 2007, a self-employed person may use one of three methods to calculate the proportion of business use of a motor vehicle, namely:
actual records
a logbook, or
a mileage rate.
The mileage rate applies to:
● self-employed taxpayers
● up to a maximum of 5,000 kilometres of work-related travel each year
● motor vehicles irrespective of engine size whether they are powered by petrol or diesel.
The mileage rate does not apply to motor cycles.
Investment and tax rates to be aligned – CCH 8 July 2009
On 7 July 2009, the Government announced that it is proposing to introduce legislation to align resident withholding tax (RWT) rates on interest and portfolio investment entities (PIE) tax rates with recent changes to the personal income tax rates and the 30% company tax rate.
New RWT rates will be 12.5%, 21%, 33% and 38%, depending on the personal tax rates of individual recipients. The new RWT rates will generally apply from 1 April 2010.
Tax rates on PIEs will also reflect the new personal tax rates, with rates ranging from 12.5% to 30% for income over $70,000. Once enacted, the new PIE rates will apply from 1 April 2010.
These changes will be incorporated as part of a taxation Bill to be introduced in July 2009 and they are expected to be passed by December 2009.
IRD & The Recession
If you are having problems meeting your taxation liabilities, it is most important that you discuss this with us and the IRD. The IRD can be helpful if they are kept up to date and there are different avenues that can assist tax payers. Please contact us for more information.
Use of Money Interest Rates Decreased
From 28 June 2009 the use of money interest rates on unpaid tax will be lowered from 9.73% to 8.91%. The overpayment use of money interest rates will be lowered from 4.23% to 1.82%.
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