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Accfocus: New Zealand Improving Vehicle Tax Regime

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Posted 13 May 2016 - 12:59 PM

New Zealand Accident Compensation Corporation (ACC) Minister Nikki Kaye has announced that ACC levies will now be set every two years, rather than annually. The new levies complement a new funding framework, set out in legislation that came into force in September 2015. "The new legislation means we now have a more principled, transparent framework for ACC funding decisions, and more stringent reporting requirements to ensure the public is better informed," said Kaye. "A key change under this new law is that the Government, rather than ACC, now sets the funding policy for ACC's levied accounts." "In the past, there was an inconsistent approach to levy-setting. This led to big swings in levies, which was hard for New Zealanders and businesses to deal with. The scheme is still subject to short-term economic volatilities, so it's important we have a funding policy that recognizes and can accommodate this." "The new policy will ensure the scheme is adequately funded to withstand economic volatilities, while ensuring levies are kept as low as possible and stable over time. It will also help remove any perception that levies are being over-collected." "The new legislation introduced last September also allowed for the removal of residual levies, which collected historical claims costs. This has resulted in fairer work levies from April 1, 2016, based on industries with the greatest injury costs paying their true share of these costs." "ACC's levied accounts are now fully funded. This is a significant milestone, as it means ACC holds sufficient funds to meet the lifetime costs of existing claims," she said. "The 2016/17 year sees significant levy reductions totalling NZD450m. Work and earners' levy cuts took effect last month, and there will be a 33 percent reduction to the average motor vehicle levy from July 1, 2016," she concluded. The ACC is to launch a consultation later this year on levies for 2017/18 and 2018/19. Tax News

Source ACCFocus
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