Cash jobs immoral, says British finance minister
Tue, 24 Jul 2012 6:33p.m.
By Adam Ray
There's a long tradition of paying cash to tradespeople, to cut the cost and avoid the GST but Britain's Finance Minister has decided it has got to stop - it's not just bad for the government coffers, it's morally wrong.
And New Zealand tax officials are also stepping up measures to combat under the table payments.
Tim Burcomb has been a builder for more than a decade and says cash deals cutting out the taxman are now more trouble than they're worth.
“I wouldn't take anything on, its too risky, too much comeback if something goes wrong,” says Mr Hurcomb.
That comeback could even mean jail here, but a British treasury secretary says cash payments are also morally wrong as they deny funds to government.
And our Finance Minister agrees.
“We expect people to pay their fair share of tax and keep tightening the law so they do that,” says Bill English.
Despite being immoral to some and illegal, cash payments are still popular, and a crackdown on UK tradesmen doing cash jobs netted $1 billion in extra taxes.
Inland Revenue is also paying more attention to the hidden economy – it will spend nearly $80 million over the next four years to stop cash payments and collect debt and should earn an extra $345 million in tax.
IRD has also set financial benchmarks for 16 industries where cash payments may be used. The hospitality industry is one of them, and it says most businesses follow the rules.
“Those doing cash jobs are undermining the industry and competing unfairly with those playing by rules,” says Bruce Robertson, Hospitality New Zealand chief-executive.
Along with accommodation and food operators, construction, electrical, and retail businesses are also being monitored.
“I guess the IRD have been a bit lax now they're tightening up realising how much they were losing,” says Mr Hurcomb.
So cash jobs may be cheaper, but they're becoming riskier too.
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10/08/2012 8:31:16 a.m.
Rof dook wrote:
Its not immoral, People just cant afford to give the government 1/3rd of their pay check so that they can go start wars which benefit only the very wealthy.
26/07/2012 11:26:47 p.m.
Matt J wrote:
Just a correction - David Gauke is not "the Finance Minister". He is one of many junior Treasury Ministers. Plus his comments have been treated with derision due to his previous role before entering politics was advising large multi national corporations on how best to exploit tax loopholes.
25/07/2012 3:59:29 p.m.
@Wiseacre where is all this money if its all offshore and as big as the US and Japanese economies together?Oh wait, would this be a similar team to Labour finance team that claimed revenue = profit?@Jim the money paid out under South Canterbury Finance was signed up by Labour as part of their loan garuntees scheme. Now if it was like banks, banks have to invest in goverment bonds, ie security, which Labour in its wisdom didn't require from SCF. SCF with all that money then lent money left/right/centre and with its management unable to cope it folded, also with run on funds driven by some in the Media telling everyone to withdraw funds which made a tight situation a business killer. Of the $1.6 bilion, only about $50 mil wasn't directly covered by the loan gurantee scheme that Labour sign NZ up for, and with legal action it was likely to also be covered, so the government decided to save the legal cost and include it. Many of those so-called rich folk were Christchurch families hit by the quake, and I suppose your preference would be to kick them in the teeth while they were down?Much of the so-called wealth hidden overseas is not hidden, and it is tax paid. Eg Apple earns money selling Ipads (eg in NZ) outside the USA, and pays tax outside the USA. If Apple transfers that money then to the USA, they have to top up the tax paid from the overseas rate (eg NZ 28%) to 35%. given that Apple is also expanding and investing overseas, they chose not to transfer money to the USA just to pay more tax and then transfer it out again as capital investment for financing growth. If the US wants their economy to pick up, they should really drop their excessive tax rates. Tax rates need to be similar around the world and they are not. Even NZ's 28% is higher than many competing countries. In the Apple example, the earning were earned overseas, and never reached US shores so never saw the US 35% business tax.
25/07/2012 8:48:13 a.m.
Jim Seaview wrote:
QUOTE: "“We expect people to pay their fair share of tax and keep tightening the law so they do that,” says Bill English."Dont worry Mr English - you have already netted the big tax avoidence culprits - you have ensured that kids delivering pamphlets and newspapers are now taxed. How else would you be able to pay the $1.6 billion (ex taxpayers) paid out to South Canterbury Finance guaranteeing all these greedy investors maximum returns on their investments.Nice priorities Bill.
25/07/2012 6:51:43 a.m.
Meanwhile, the global super-rich elite have exploited loopholes in cross-border tax rules to hide an extraordinary $13 trillion(US) of wealth offshore – as much as the American and Japanese GDPs put together – according to research commissioned by the campaign group Tax Justice Network.
Multinationals and the super-rich exploit tax loopholes to avoid paying their fair share. Rather than chasing newspaper boys for loose change, we should concentrate on closing the loopholes which let the rich get away with theft. And we need to jail them and their parasitic enablers - the accountants and bankers that have made a business out of conspiring to steal from their fellow citizens.
Then, hopefully, the government could focus on stimulating the economy, rather than squeezing the life out of it with reduced government spending, public service cuts and tax rises for the 99% of people who aren't rich enough to avoid paying their taxes.
How much are New Zealand's *elite* stealing from us by exploiting tax loopholes?
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