Secondary tax

Stuff reports:

Labour has announced plans to scrap secondary tax for workers with more than one job – but National says it’s already implementing the policy.

In the current system, those with more than one job often pay a higher rate on their secondary income.  It is expected they claim a refund on the wash-up at the end of the financial year.

However, Labour says this is too complex, overpayments are often not claimed back and the system hits hardest those in casual work.

Within five years of taking office Labour would develop an alternative to secondary tax. In the interim, it would implement special tax codes until an Inland Revenue computer upgrade comes online.

I’m not sure you can call this a policy. At best it is a desire. A policy would be an announcement of the alternative. All they have announced is that at some stage before 2020, Labour will develop an alternative.

However, National’s revenue spokesman Todd McClay said they were already going ahead with the policy.

He said IRD’s Business Transformation plan will “address the PAYE system, including secondary tax and end-of-year square-ups.”

And that work is due to be completed by the end of 2015, well before 2020.