Bad Precedent Set By Cullen's Retrospective Legislation

The retrospective legislation proposed by Revenue Minister Michael Cullen to avoid refunding GST money to schools, businesses and other GST taxpayers is unfair and sets a dangerous precedent about the application of all legislation to backdated events or transactions, National's Revenue spokesperson Annabel Young said today.

"Taxpayers need to have certainty that, if they comply with the tax law as it is today, they will not be penalised if the Government changes the rules later.

"$50million in GST refunds is owed to schools, universities and polytechnics but now they won't get it. Travel organisations will be short-changed by $150million.

"Schools have complained that some lucky taxpayers have had their claims paid out and their money won't be touched. It seems to depend on which IRD office you sent your claim for a refund to. What's fair about this?

"It's a double standard that under Cullen's plan those that were lucky enough to get a refund keep it, but those that went to an unfriendly IRD office miss out. What's worse, those that didn't get a refund were given an expensive run-around for up to two years because the IRD didn't know what to do.

"If Dr Cullen gets away with using this strategy once, he will use it next time the Government is in a tricky hole, and that's a death blow to the Rule of Law.

"It is unacceptable that the IRD has known about this problem since 1999 and done nothing about it. Wielding the big stick of retrospective legislation is no solution to this problem and it creates a dangerous precedent," Annabel Young said.

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