For years a Government tax credit has existed for low-middle income earners in the N.Z.$24,000-48,000 pay range. It is called the Independent Earner Tax Credit Now the Government has said it is going to get rid of the I.E.T.C. on the grounds that so few people have applied for it, that it is not worth continuing.
During the Fiscal Budget announcement on Thursday 25 May 2017, the Government announced a new tranche of changes to taxation in New Zealand. Scrapping the I.E.T.C. was part of it. The Government says though that individual who claim it will still be compensated via a movement in the upper limit of the lowest tax bracket (current 10.5% up to $14,000, which will be moved to $22,000 on 01 April 2018).
This is rather rich. The I.E.T.C has existed for several years in New Zealand. But many many people who would qualify for it have never heard of its existence. This was well demonstrated when Gabrielle Purchas, the Managing Director of WooHoo, was interviewed for a story on the issue said it would seem that many people were not even aware that it existed. Some of them were even employees of her own company.
So how much effort was made at the time the I.E.T.C. was introduced to explain to New Zealanders what it did and why they should be interested in it? The I.E.T.C. was introduced in 2009 in the first set of taxation changes made by National after coming to office the previous year. It is intended to be an incentive to move towards full time work according to an I.R.D. information release.
To see if you are eligible for some of the $68 million that potentially owed to New Zealanders from this I.E.T.C., go here and do the test for your primary income source. And let us see how many people we know who would qualify for this.