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 4 - Benefits and costs

4.1 Research shows there is considerable public trust that information sharing reforms will be beneficial to society, but this has to be balanced with a commitment to transparency by the Government.

4.2 From a customer perspective, greater sharing of customer information facilitated by the proposed AISA would, over time:

  • reduce the need for individuals to interact with agencies on multiple occasions or to provide duplicate information to government agencies;
  • make it easier for individuals to meet their obligations, thereby reducing adverse outcomes such as accumulating debt; and
  • meet evolving expectations of the public to provide joined-up social services across government agencies.

4.3 From a government and agency perspective, the wider scope of the agreement and having all information sharing under one agreement would, over time:

  • contribute to the Government’s Better Public Service objectives of better service to New Zealanders;
  • provide a foundation on which to base future sharing of information among the two agencies;
  • enable agencies to provide services more efficiently and effectively, by improving the timeliness and accuracy of benefits and subsidies, and assisting the assessment of tax obligations;
  • provide easier and faster access to government services and reduced compliance costs for customers;
  • reduce the administration costs associated with agencies sharing information; and
  • create public confidence through the perception of agencies’ efficiency in managing customer information – sharing the right information, in the right way, at the right time.

4.4 Benefits resulting from information sharing between Inland Revenue and the Ministry of Social Development are already evident under the current information sharing agreements. Information sharing has been helping the Ministry of Social Development to provide improved services by accurately determining entitlement to benefits, and quickly identifying changes in income leading to changes in entitlement.

4.5 Currently, one of the agreements shares employer monthly schedule information to identify all working-age beneficiaries who also have employment income. Since its implementation in 2012, the information shared has helped correct thousands of benefits (including cancellations, overpayments and underpayments). This represented a dramatic reduction in beneficiary debt. For example, the average debt value for 2014–15 was $3,877 while the average for 2015–16 reduced to $1,428.

4.6 For the Ministry of Social Development, the benefits are reflected in the accurate determination of entitlements, early detection of customers with overpayments and identification of fraud. This ensures customers are given an opportunity to comply in a timely manner, which reduces the overall number of cases requiring further action.

4.7 For the Government, the more accurate provision of benefits and subsidies, and assessment of tax obligations will reduce the costs of providing such services.

4.8 Both agencies are currently going through a process of transforming their IT systems. Officials are working through the extent to which the IT systems used for the provision of information between the two agencies can be incorporated within each agency’s transformation programmes. To the extent to which this can occur, the additional costs to the Government will be kept to a minimum.