Finance Minister Grant Robertson says there won't be any leniency shown to businesses who willfully refuse to pay GST in protest against COVID-19 restrictions.
A group of around 30 Auckland-based hospitality businesses are reportedly planning to withhold GST because the new level 2 rules will make it so hard to do business, they might as well not bother opening.
Some even say they'd rather stay at level 3 because there's more financial support on offer, Stuff reports.
With Delta being so infectious, level 2 restrictions have been beefed up - including a limit of 50 indoors at venues, people have to stay at least a metre apart and masks are mandatory when not eating or drinking. No dancing is allowed - everyone has to be seated.
While the country is split between level 4 (Auckland) and level 2 (everywhere else), employers in level 2 regions can still apply for the wage subsidy if they can show the level 4 restrictions in Auckland are having a major impact on revenue.
As Prime Minister Jacinda Ardern explained on The AM Show on Tuesday, "if any part of the country is at level 3 or 4, someone can apply for the wage subsidy".
But Auckland businesses say this is unfair, because when they go to level 2 the rest of the country will presumably also be at level 2, if not level 1, so they won't be eligible.
"We don't want to pay GST, as a protest to the Government," one Ponsonby bar owner told Stuff.
Robertson appeared on The AM Show on Thursday morning, and was asked if there would be any leniency or forgiveness shown to businesses who refused to pay their tax.
"No," the Finance Minister said. "I understand the stress and the pressure these businesses are under. If businesses are unable to meet particular payment dates, there is the ability for the commissioner of Inland Revenue to waive penalties for that. I'm not sure the commissioner would look fondly on people who were deliberately doing that.
"But if there were good reasons for that, the commissioner has the ability to grant a waiver of penalties… What I'm encouraging all businesses to do is to hang tough, to know we understand how difficult this is."
With Delta overseas proving difficult to stamp out, it's possible the country could spend longer at level 2 than it has in the past, just to be sure it's eliminated - provided we get that far. Despite the tougher restrictions, particularly on hospitality businesses, the wage subsidy at present only kicks in if somewhere in the country is at level 3 or 4.
Robertson said the Government is continually evaluating its options.
"We will take an ongoing look at this. The longer an outbreak goes on, I know how tough it is for businesses. We've put into the economy about $2 billion over the last couple of weeks to support people through this. As we have done in the past, we will continue to adapt our processes and schemes to the situation we find ourselves in."
Ultimately, wiping out the transmission of the virus remains the goal - the short-term economic pain worth the long-term gain, in Robertson's view.
"We as a country have managed to have our businesses open for more days over the last 18 months than almost any other country in the world."