Covid 19 coronavirus: Document dump shows officials shot down GST plan to help businesses

Treasury and Inland Revenue Department officials strongly argued against a proposal to give businesses a break from paying GST as they struggled with the impacts of Covid-19.

The suggestion is one of many contained in thousands of documents of official advice that have just been released by the Government.

The documents, about the national Covid-19 response, have been broken down into "alert Levels and restrictions", "border", "education", "health response", "housing", "income support measures", "offshore issues", "supporting the economy" and "wage subsidy and leave schemes".

The documents reveal top-level advice received by Ministers, draft policy plans and hundreds of reports spanning a period since early February.

One paper, written by the IRD in early March, outlined a number of potential tax measures the Government could undertake to ease the burden of Covid-19 on businesses.

The papers said officials were aware of some policy ideas whereby the obligation of businesses to pay GST was removed.

But the idea was shot down.

"Removing an obligation to pay GST will provide more benefit to unaffected taxpayers and no benefit to exporters or taxpayers getting refunds," the paper said.

"Inland Revenue and the Treasury strongly recommend that these sorts of measures are not implemented."

Officials said the idea was likely to create "significant administrative issues" and would be too complex to deliver within tight timeframes.

They also said it would be difficult to police compliance.

The report was prepared on March 5, when New Zealand had only three cases of Covid-19.

But even back then, Cabinet was considering a "range" of tax options that were able to be deployed, "given the likelihood that the economic downturn caused by the Covid-19 outbreak may be longer and deeper than initially anticipated".