CBT: Cash Basis Tax

Pay as you Earn / Refund as you Expense and Depreciate

Consider these statistics

• Nine out of ten liquidated companies had tax debt.
• In May 2025 there were 99 winding-up applications, of which 70 were initiated by the IRD.
• The IRD is  the largest creditor in many company liquidations.
• When a company liquidated:
  • Employees: every closure turns tax-paying workers into beneficiaries drawing on the government
  • Unsecured creditors – typically other small businesses suffer because the IRD and the banks collected first
  • Friends and family investors – typical investors who invested in the business are washed out

In the end, everyone loses when a company goes into liquidation. The government’s books take a hit, taxpayers shoulder the burden, the nation’s economic wellbeing declines — and those who suffer the most are the ones who can afford it the least. 

Why? Because the government effectively runs a poorly managed lending scheme disguised as tax collection.
It made sense in the 19th century, when accounting was manual and cash accounting was complicated.

IT MAKES NO SENSE IN TODAY’S WORLD — WHEN EVERY TRANSACTION IS DIGITAL.

Today almost all taxable transactions are digital. They are instantly recorded at the same time they are transacted. Yet we record the tax transaction as much as six months later for GST and a year later for income tax. Small businesses share some blame for falling behind on tax payments, but the deeper fault lies with a system that enables — even encourages — such neglect through outdated collection practices.

For small businesses in today’s digital environment there is a solution that can cut tax arrear liquidations by 99.9%. CASH BASIS TAX.