Companies that get their basics right are better able to balance tax risks and opportunities, giving them a significant business advantage in a difficult New Zealand economy, according to a KPMG International report.
The report, "Good, Better, Best: The race to set global standards in tax management" also shows that as governments face political pressure to address the need for increased tax revenues, revenue authorities are responding by stepping up efforts to improve global cooperation, reduce tax avoidance and evasion, and improve the efficiency and effectiveness of their approaches to tax audit controversies.
KPMG Senior Tax Partner John Cantin says, "In New Zealand, as the Government addresses the need for a broader tax base, and Inland Revenue steps up to protect the New Zealand tax base through audit and litigation activities, now is a good time for New Zealand companies to review, prepare and improve their tax risk management and governance.
"It is vital that senior management are aware of, and comfortable with, the tax risk appetite of the business and any tax positions taken."
In this context, a fundamental shift in the focus of the tax function is occurring for New Zealand companies. Previously, there was a clear emphasis on establishing value from tax planning opportunities. Under the heightened levels of Inland Revenue scrutiny, companies must now identify and utilise value-add opportunities whilst maintaining a proper focus on tax risk management.
Some of the building blocks that can be put in place by companies, according to KPMG include:
- Active participation and influence in the broader business;
- A focus on supporting the business and value added activities;
- A coherent and documented tax governance and risk strategy; and
- Standardised tax processes and structures.
ENDS
For further information please contact:
Sneha Paul, KPMG Communications on 09 363 3590 or 021 243 8997