Hon Peter Dunne

Minister of Revenue

Tuesday, 23 November 2010
Media Statement

Dunne: Tax bill makes compliance easier

As well as cutting tax in Budget 2010, the Government is working towards making compliance with tax laws easier, Revenue Minister Peter Dunne said today.

“The Taxation (Tax Administration and Remedial Matters) Bill introduced in Parliament today abolishes gift duty, which no longer raises any significant revenue and which imposes a high level of compliance costs on the private sector,” Mr Dunne told the House.

“The changes in the bill abolishing gift duty and the reasons behind the change have been well covered in public debate since I announced the possibility in June,” Mr Dunne said.

“The abolition of this worn-out tax will be good news for the private sector.

“So too will be a number of changes to the procedural rules around the tax disputes process, which together with some administrative changes to the process should make for a more streamlined process for all concerned,” he said.

“The bill also introduces changes to the tax administration rules to give Inland Revenue greater flexibility to share tax information with other government agencies and improve the quality of information across government.”

Mr Dunne said changes to the tax information-sharing and secrecy provisions in the bill would help overcome issues caused by the narrow circumstances in which Inland Revenue can currently share information with other government agencies.

“For example, Inland Revenue is unable to tell another government department if a person is misusing the social assistance system unless that department specifically asks about that person by name.

“The proposed new rules will allow Inland Revenue to share this information if that agency has the ability and authority to collect that information in its own right,” he said.

“To protect taxpayers’ privacy, the specific purposes for which the information collected will be used will be set by Order in Council,” Mr Dunne said.

“Under the current rules it is also unclear whether Inland Revenue can accept the assistance of a relative or friend helping a taxpayer who is a non-English speaker or who has hearing difficulties, even with the taxpayer’s permission.

“The proposed new rules will give Inland Revenue a limited discretion to release more information for tax administrative purposes than the current rules allow,” he said.

Other changes in the bill were also aimed at making Inland Revenue more user-friendly for taxpayers.

“The use-of-money interest rules that apply to underpayments of tax will be clarified to give taxpayers greater certainty that this interest is deductible for income tax purposes.”

“The remaining items in the bill such as enhancements to the tax pooling rules and technical changes to the PIE rules are mainly remedial in nature, to ensure the rules work as intended,” he said.

ENDS

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