Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Government accepts recommendations of IRD Inquiry

Government accepts recommendations of parliamentary inquiry into IRD

The Government has accepted the bulk of the recommendations of last year's parliamentary inquiry into the powers and operations of the Inland Revenue Department.

The Government's response to the recommendations is contained in a report tabled in Parliament today.

"The recommendations of the previous Finance and Expenditure Committee have made a valuable contribution to improving various operational matters in the Inland Revenue Department," Revenue Under-secretary John Wright said today.

"The committee began its inquiry in an atmosphere of public concern about the way Inland Revenue conducted its operations."

"It's vital to maintain public confidence in the integrity of the tax system," he said. "Our tax system is based on voluntary compliance with the law. If the integrity of the system is perceived by taxpayers to decline, so too will voluntary compliance. For this reason people must see that the law is being applied in a professional manner."

"The Government supports most of the recommendations, and has given the go ahead to Inland Revenue to proceed with the implementation of the recommendations it has not yet implemented. The Government is pleased with the department's progress in addressing the recommendations," Mr Wright said.

The recommendations agreed to by the Government include:

- Taxpayers should have access to their personal information held by Inland Revenue. (The Government agrees, so long as it does not impinge upon the privacy rights of others or adversely affect the department's ability to collect revenue.)

- When deciding whether to impose a penalty, Inland Revenue should take into account the taxpayer's record of "good behaviour". It should also exercise greater flexibility when applying shortfall penalties and such penalties should not apply when a taxpayer has made an inadvertent error. (The Government has included these issues in the terms of reference of the review of the compliance and penalties legislation in the Tax Administration Act 1994, announced last week.)

- The method by which use-of-money interest is calculated should be reviewed to determine if the interest rate for overpayments and underpayments should be changed to reduce the differential between the two. (The Government has also included this in the compliance and penalties review.)

- Inland Revenue should re-establish a problem resolution service for taxpayers. (The department is developing a new complaint management process.)

- Inland Revenue should establish a taxpayers' charter outlining the rights and obligations of taxpayers. (The department is developing a new charter in consultation with interested stakeholders.)

"Some of the recommendations fall clearly within the scope of the wider review of the compliance and penalty legislation," Mr Wright said. "That is a major review of far-reaching legislation introduced in 1997. The legislation sets out the obligations of taxpayers and the standards they are expected to meet. It also prescribes standard penalties across all taxes and duties for non-compliance."

"Two changes inspired by the committee's recommendations have been included in legislation introduced into Parliament earlier this month. They introduce greater flexibility and leniency into the administration of the compliance and penalty legislation and into Inland Revenue's debt management process."

"The Government has still to decide on two of the recommendations: that of appointing a specialist tax adviser position within the office of the Ombudsmen, and shifting the responsibility for drafting tax law to the Parliamentary Counsel Office."

"The only recommendation the Government disagrees with is that to establish a board of directors to oversee Inland Revenue's operation of its powers. We believe that a board of directors would be unnecessary and would dilute the accountability between the Minister and the Commissioner. The idea was also considered and rejected by the 1994 organisational review of Inland Revenue," Mr Wright said.

Background note: The Finance and Expenditure Committee began its inquiry in April last year and reported to the government of the day in October. Mr Wright was on the committee and took part in the inquiry. As Revenue Under-secretary in the present Government, Mr Wright is responsible for overseeing issues relating to the compliance and penalty legislation, with particular reference to the Finance and Expenditure Committee inquiry.

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Tax Working Group’s Road Map

Trying to analyse the interim report on the Tax Working Group (TWG) is like trying to review an entire All Blacks game, but at the half- time mark.

With so much still to be finalised, Sir Michael Cullen and his colleagues are going to need all the All Blacks’ fabled finishing skills to get a coherent, fiscally neutral package together by the February 2019 deadline. More>>


Meth Testing Report: Housing NZ "To Right Wrong"

Phil Twyford “Housing NZ acknowledges that around 800 tenants suffered by either losing their tenancies, losing their possessions, being suspended from the public housing waiting list, negative effects on their credit ratings or, in the worst cases, being made homeless.” More>>


No Reshuffle: Meka Whaitiri Removed As A Minister

Meka Whaitiri will be removed as a Minister with immediate effect... The decision was made after receiving a report into an incident that occurred on 27 August in Gisborne, involving Meka Whaitiri and one of her staff. More>>


Pay Equity Bill: Making History For Women’s Pay

The Equal Pay Amendment Bill, introduced to the House today, will make it easier for workers to make a pay equity claim , using a more simple and accessible process within New Zealand’s existing bargaining framework. More>>


Suffrage 125: NZ A Trailblazer For Women

“We acknowledge the work of Kate Sheppard, Meri Te Tai Mangakāhia, and all of the suffragists who tirelessly campaigned for the vote… Today we also need to ask each other: how we can continue to make our country a fairer and better place to continue the legacy of the suffragists.” More>>


Asylum: Refugee Quota Increasing To 1500

“The quota increase will take place from July 2020. In the meantime, we will work to increase the number and spread of refugee resettlement and support services. We need to make sure we’re prepared for this change in policy.” More>>





InfoPages News Channels