The Taxpayers’ Union is welcoming the Prime Minister’s intervention to rule out the Inland Revenue Department’s proposal to apply Fringe Benefit Tax (FBT) to all utes worth $80,000 or more and other work vehicles — a plan directed by Climate Change and Revenue Minister Simon Watts.

In response to media comment issued by the Prime Minister's Office last night, Taxpayers’ Union Executive Director Jordan Williams said:

“Simon Watts was pushing a new Ute Tax, without his Cabinet colleagues or the public even knowing. Had it gone ahead, farmers and tradies would have been slammed with thousands of dollars in additional tax each year – not just once like Labour’s Ute Tax, but every year.”

“The documents are crystal clear. IRD was instructed by Minister Watts to proceed with and consult with the tax industry on the implementation of a new FBT regime that would capture work vehicles, regardless of how they’re actually used. This was a massive tax hike by stealth.”

"As far as we can tell, the Revenue Minister didn't consult with any taxpayer, business, or farming groups, despite work having been done on this for nearly a year. Had he bothered to engage, the unfairness and political risk would have been obvious. That lapse saw the Government facing backlash because it was tax boffins who blew the whistle and it took everyone by surprise. Minister Watts should learn the lesson."

“Within hours of our campaign launch yesterday, the National Party was in damage control. Within six hours, the PM’s team overruled Watts and confirmed the policy would not proceed.”

The Taxpayers’ Union yesterday revealed documents showing that IRD had been working on changes to remove the logbook exemption for work vehicles and impose FBT on the assumed private use of double cab utes. According to IRD’s own estimates, the tax grab would have cost farmers, tradies and other ute owners $100 million per year.

“We give credit to the Prime Minister and his office for stepping in quickly and pulling the handbreak.” says Mr Williams.

“This is a clear win for taxpayers and proof that grassroots pressure works. We thank the thousands of Kiwis who used our online tool to email National MPs and demand the Ute Tax 2.0 be scrapped."

ENDS

The New Zealand Taxpayers’ Union is calling on the National Party's leadership to rule out Simon Watts' proposed changes to the Fringe Benefit Tax (FBT) regime that amount to a new, harsher version of Labour’s infamous “Ute Tax”.

Taxpayers’ Union Executive Director Jordan Williams says, “National campaigned against Labour’s Ute Tax. More than 38,000 ute owners signed our petition to scrap it. Now, astonishingly, the National Party’s own Climate Change Minister has been caught out instructing IRD officials to bring in a ute tax of his own — and it’s even worse than Labour's.”

According to Inland Revenue Ministerial briefing documents obtained by the Taxpayers' Union, Minister Simon Watts has instructed officials to develop new FBT rules that would result in ute-owning farmers and tradies being taxed annually — not just once, as under Labour’s version.

“Labour’s Ute Tax maxed out at a one-off $5,175 when buying a new ute. Simon Watts’ proposal would see some work vehicle owners stung with more than $8,000 in tax every single year,” says Williams.

“Under current rules, if a ute is used almost entirely for work, a logbook can be kept to ensure FBT doesn’t apply. But Minister Watts wants to abolish that option and instead slap a flat tax on every work vehicle worth $80,000 or more — even if it barely leaves the farm.”

Williams continued, “Let’s be clear: this is not about fairness or simplification. This is a calculated, $100 million-a-year tax grab that targets the very people who keep our economy running — farmers, tradies, and rural New Zealanders. It’s Labour’s Ute Tax, but this time it’s blue.”

“National MPs were just at Fieldays bragging about scrapping Labour’s Ute Tax. Either they’re being sneaky or they have no idea what their own Minister is doing behind the scenes. If this change proceeds, we will not be pulling punches in calling out the betrayal.”

“The National Party must rule out this outrageous tax on work vehicles. New Zealanders didn’t vote for this. It's essential the National Party leadership overrules the Climate Change Minister.”

The Taxpayers’ Union is welcoming Local Government Minister Simon Watts’ commitment to rates capping made last night in Wellington but is urging him to expedite the policy. The Union warns that continued delays will undermine public confidence and emboldening opponents of reform such as Local Government New Zealand (LGNZ).

Taxpayers’ Union Local Government Campaigns Manager, Sam Warren, said:

“More than 25,000 New Zealanders have already signed the Taxpayers’ Union’s Cap Rates Now petition. It’s time for Watts to listen – now, not later.”

“Only opening for consultation at the end of this year is simply not good enough. Polling shows that Kiwis are losing trust in National to tackle the cost-of-living crisis and with this slow response, we can see why. A primary driver of the cost of living is out of control rates, which have increased on average by more than a third since 2022.”

“The timeframe announced by Watts also means that voters are going into the local elections in October blind to what rates could or could not be, undermining local democracy. LGNZ know this, which is why they have been throwing sand in the gears to try and delay the policy.”

“Minister Watts is complicating what should be a straightforward fix. The policy work can and should be done within months, not dragged out to suit the bureaucrats and lobby groups like LGNZ who benefit from the status quo.”

The Taxpayers’ Union is slamming IRD and Statistics NZ after the Government announced it’s scrapping the Census and replacing it with a mass data-harvest from across government departments without public consent.

IRD will share sensitive personal data like income and benefit details that must be linkable back to individual taxpayers to be usable by Statistics NZ.

Taxpayers’ Union spokesman James Ross said:

“Big Brother is back with IRD’s latest taxpayer data lolly-scramble. There’s zero excuse for leaking sensitive income and benefit data, and covering for Stats NZ’s Census failure last time around doesn’t come close to justifying it.”

“After previously leaking more than 250,000 taxpayers’ unencrypted details to foreign tech giants, Revenue Minister Simon Watts is back for round two. This time, it’s every taxpayer’s identifiable data on the line.”

“Taxpayers aren’t being asked, and they haven’t consented. Just like with IRD’s custom audiences scandal, there are huge ethical concerns being swept under the rug in the hope no one notices. Not to mention possible legal breaches of the Tax Administration Act.”

“Minister Watts’ silence while his department repeatedly throws Kiwis under the bus speaks volumes. His job is to represent taxpayers, not sell them out to make life easier for bureaucrats.”

The Taxpayers’ Union is calling for the plan to be scrapped.

Up to 55% of calls from taxpayers are being rejected by the IRD because it does not have enough staff rostered on to answer the phones, according to data supplied to the Taxpayers' Union covering a 2-week period in May this year.

At tax time, the least the Government could do is make sure it answers the phone," says Jordan Williams, Executive Director of the Taxpayers' Union. "On each of the three days the IRD have had to cap the calls coming in, they didn't even answer the number of calls their own estimates said they could expect.

These problems with the phones came on top of significant downtime of the IRD's website recently.

Paying tax is bad enough but having to wait hours on the phone only to be hung-up on, is a slap in the face by the taxman.

IRD's slogan used to be 'We're here to help'.  Nowadays, you're lucky if they're even there.