Inland Revenue Acts
The Inland Revenue Acts set out the obligations that customers and Inland Revenue must meet, including for the provision of information and returns. There are three categories of requirement dealing with how communication/interaction should be made:
- those that are silent on how the engagement should be made;
- those that give the Commissioner a discretion on how the engagement should be made; and
- those where the specific form of engagement is prescribed in legislation.
No legislative change is needed for the first two categories.
In the third category set out above, provisions which, for example, require information to be provided “in writing”, or “by post” would appear to prevent the move to digital services.
The Electronic Transactions Act 2002 can override these rules, if, effectively, both parties to the transaction consent. This would enable the Electronic Transactions Act to potentially override even specific requirements in tax legislation.
While the Electronic Transactions Act would allow tax communication to move to digital services even in light of express requirements for non-digital services, this would conflict with the important principle of tax legislation being as simple and clear as possible.
The Electronic Transactions Act would also not deal with situations where the Commissioner had decided that certain customers should be required to use digital services.
The Government therefore proposes that the Revenue Acts be reviewed and, where they contain provisions that appear to prohibit digital services from being used, they be amended to use neutral language.