Inland Revenue - Tax policy Tax Policy

News and information about the Government's tax policy work programme, including:
- proposed changes to the laws that Inland Revenue is responsible for
- updates on the progress of bills through Parliament
- policy announcements

Chapter 2 - Background

2.1 Inland Revenue and the Ministry of Social Development have been exchanging targeted information since 1994, to enable the two agencies to fulfil their functions more efficiently and effectively. The existing exchanges provide for:

  • better administration of shared services (such as Working for Families tax credits, child support, and student loans);
  • more accurate assessment of tax obligations; and
  • correct entitlement to benefits and other subsidies as a result of income and relationship information being sent from Inland Revenue to the Ministry of Social Development.

2.2 There are currently nine legislative provisions for the sharing of information between the two agencies. These provisions are reflected in the six administrative processes illustrated in the diagram on page 2. The provisions are:

Tax Administration Act 1994
Section 81BA Pro-active sharing of Inland Revenue information with the Ministry of Social Development, to identify beneficiaries who are receiving income while on a benefit, in order to reduce benefit debt.
Section 82 Exchange of information to verify entitlement to benefits or earnings-related compensation.
Section 82A Exchange of information to ensure correct provision of an IRD number, and to prevent cessation of a benefit.
Section 83 Exchange of information for the purposes of providing a Community Services Card to a beneficiary or to verify their entitlement to a Community Services Card.
Section 84 Exchange of information to identify when a family is receiving Working for Families tax credits from both Inland Revenue and the Ministry of Social Development, and to determine whether the family was entitled to any benefit.
Section 85 Exchange of information to assist the Ministry of Social Development to recover money owed by debtors.
Section 85G Exchange of information to enable Inland Revenue to provide Working for Families tax credits, to seek an application from a family for a tax credit, to seek additional information in relation to a tax credit, or to cease payment of a tax credit.
Student Loan Scheme Act 2011
Section 207 Exchange of information for the purposes of validating loan applications, setting up and maintaining Student Loan accounts and recording loan transactions.
Child Support Act 1991
Section 240 Exchanging information for the purposes of carrying into effect the Child Support Act 1991 and the Social Security Act 1964.

2.3 Although the current information sharing is providing excellent improvements across a range of areas, the Government believes a more comprehensive approach would allow these two agencies to provide a better customer experience. For instance, the current information sharing agreements provide limited means to better support citizens or gain future efficiencies because of the specific purposes of the agreements.

2.4 The information exchanged is based on specific products, with each information sharing agreement having a very specific purpose. This restricts the use of the information to the assessment of a specific benefit or subsidy, and has led to multiple requests for the same information under different agreements, when it is needed for different purposes.

2.5 Research conducted by Inland Revenue and Victoria University of Wellington[1] indicates that New Zealanders are generally supportive of information sharing across government. They expect high standards of management around the information shared, and they expect their personal circumstances to be considered holistically. Information sharing will only achieve the benefits from the proposals outlined in this document if government agencies are trusted to share only when appropriate, and handle private information respectfully and with transparent processes.

2.6 This research also explored cultural perspectives on information sharing. In general, the public sees information sharing between government departments as “potentially beneficial but also needing strong protocols for privacy, data quality, transparency, and consent”.[2]

2.7 Some common themes emerged from research on 13 overseas tax jurisdictions[3] about information sharing frameworks. These included:

  • requirements for clear processes;
  • public registers of approved information sharing activities;
  • scrutiny and reporting by an authorising body; and
  • the need for guidance to be provided to those processing personal information.

2.8 Of the 13 jurisdictions that took part in the research:

  • ten allow for disclosure by government agencies if public interest/benefit to the individual outweighs privacy considerations; and
  • nine allow personal information to be used for reasons other than the purpose for which it was gathered, provided the new use is either “compatible with” or “consistent with” the original purpose.

2.9 The proposals in this document would embed similar checks aligned with New Zealand legislation.

 

[1] Professor Miriam Lips, Dr Elizabeth Eppel, Amanda Cunningham & Virginia Hopkins Burns, Public Attitudes to the Sharing of Personal Information in the Course of Online Public Service Provision, Victoria University of Wellington, 2009.

[2] Inland Revenue, Information sharing between government agencies – Cultural perspectives, Inland Revenue, 2012.

[3] The Netherlands, Denmark, Belgium, Austria, Australia, Canada, Alberta, British Columbia, New Brunswick, the United Kingdom, South Australia, New South Wales and New Zealand.