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Using digital services

Do you agree that the Commissioner should use her existing powers to facilitate the move to digital services?

Where customers could move to digital services but have chosen not to, the Commissioner of Inland Revenue would need to work alongside these customers to support and encourage them to adopt digital services. The Commissioner also has the ability to determine the range of services which are offered, under her powers to administer the tax system.

Those powers are set out in section 6A of the Tax Administration Act 1994, and give the Commissioner the duty to collect the highest net revenue over time, having regard to:

  • the resources available to the Commissioner;
  • the importance of promoting compliance; and
  • the compliance costs incurred by taxpayers.

Imposition of additional and avoidable costs on tax administration system

Section 6A requires the Commissioner to compare the additional costs these customers would impose on the tax system by not using digital services with the costs these customers would face in moving to digital services, and using those digital services on an ongoing basis. The Commissioner could make the decision under this provision to remove non-digital services for some customers for some transactions.

As well as the additional and avoidable costs imposed on the tax system, the reluctance of these customers to use digital channels may also be imposing additional and avoidable costs on other agencies which rely on information provided by Inland Revenue. The Commissioner may also wish to take these costs into account in her approach to the use of digital channels by these customers.

Where others are denied the benefits of the new tax administration system

The Commissioner of Inland Revenue would need to work alongside those who provide information about the tax position of others, and who are being denied the benefit of the new tax administration system, to  support and encourage them to adopt digital services. Again, the Commissioner’s powers under the Tax Administration Act would allow her to restrict the availability of non-digital channels for some transactions carried out by those who provide information if this was appropriate, although this would need to be evaluated against compliance costs for those affected.

The Government sees the satisfactory resolution of this issue as critical to ensuring that the New Zealand economy as a whole derives maximum benefit from the Government’s investment in the new tax administration system, and the delivery of this benefit to some sectors of the economy should not be prevented by the reluctance of others to adopt digital services.

Accordingly, the Government proposes to make it clear that any decision by the Commissioner to require these customers to use digital channels has the full force of law.

Do you agree that the Commissioner should use her existing powers under the Tax Administration Act, which include the requirement to have regard to compliance costs, to faciliate the move to digital services?

Comments

George Spark
This is a long piece of somewhat convoluted text which appears to say: "Do you think the IRD should be able to force tax payers to go digital and if they won't, fine them (or maybe jail them?)". I think the IRD should be transparent and fair in its intentions and moves, and provide ample notice and reasonable alternatives for those who don't comply with requests to go digital, to go digital via alternative means (using a tablet with pen interaction for example at the local Post Shop or bank branch or similar as mentioned in my other comment). However if after a number of years notice, and the availability of easy alternatives that won't require someone to buy a computer, a tax payer does not go digital, some element of pressure should perhaps be used. In the end, it is just a process (like manually filling out a form and sending it by postal mail is a process) and it is a reasonable expectation that one should interact with the government by means of a set process, as long as it is seen as a fair and reasonable process by the majority of people.

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1 year ago
Kevin
No is the simple answer. You can't force people to do something just because you want to! Sounds like an abuse of power to me. Give credible alternatives and encourage their use NOT force!

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  • disagree2
1 year ago
Glenn
I am concerned by the attitude underlying this suggestion. 1. these are people, not machines - please respect them 2. Government exists to pool societies resources to provide those resources we cannot produce as individuals. It also exists to provide a regulatory framework that protects our citizens and our common resources. I do not believe forcing citizens through threat of penalty to "go digital" fits within this brief. The thin end of the wedge? What else will "government" decide is mandatory? 3. This approach does not encourage IRD management to develop and continuously improve an excellent digital service. It encourages mediocrity and forces people to use what may be a substandard service.

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1 year ago
wendy
How can anyone answer this question without knowing what is involved and how it will affect our personal rights, choice, privacy and data protection?

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  • agree2
  • disagree1
1 year ago
maygray
No this is wrong. Again where are the controls? This is again coming from the wrong place of overbearing Big Government and Big Brother without proper concern for the primary concerns of the customer, who pay your wages. New attitude please, of respect for the customer,their concerns of privacy and data protection, clear evidence of control mechanisms on tax department abuses, openness and transparency plus helpful attitude not this exercise of power nonesense.

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1 year ago
Dwayne
Horrified!! "Imposing costs onto other users" is a manufactured argument when in fact IRD is imposing costs on taxpayers/government by operating inefficient and incompatible digital systems. Serious abuse of power. Serious misunderstanding of the "having regard for compliance costs" requirement. Heres a reminder: compliance costs are the real and often non-monetary costs that fall on users and other affected parties as a result of being forced to provide or process information on behalf of the government. Those users who resort to paper filing or 6-monthly online returns do so because the alternatives would waste more of their time, involve risks, create stress, or require assistance that is costly, unjustified or unreasonable for their situation. The point is to live your life, play your part in the economy as well as you can, and make tax problems go away as painlessly as possible. If its easier to do tax online, it will happen. If it creates a risks of running out of money as the business dries up, requires extra phone calls to accountants to query interim results, or wastes time that could have been spent generating income, then a taxpayer should look for an option that makes more sense to them.

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1 year ago
L Gaugau
Maybe not the right marketing strategy guys .... leak that out early so at least you can say "we did mention it" Honesty is the best policy .... no doubt about that but Timeline needs some humane strategy We are struggling with putting the homeless into homes, employment and more, this is why I am going for DIGI-biz to ensure customers get paid by their own tax money to help them out ... not to get in more debt by a bill or get lost in the technology because that is the only reason why people would not want to go DIGI and that is where your marketing service strategy should be enforcing not the GO STRAIGHT TO JAIL card.

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1 year ago
L Gaugau
People aren't transparent to IRD because they a) not educated in tax law and so don't know which form or how to calculate them to fill it in or b) refer to a). By enforcing section 6a go straight to jail card you will get more money for non-compliance and more people becoming homeless, increase employment, reduce importing, exporting and reduce consumption, sure signs of an economy being measured for success. If you want to increase the GDP and reduce inflation then build on strategies and systems that improve reoccurring revenue's for all customers rather than pointing it at existing global giant NZ customers to fork out the bill because it only sends out the message that only the rich will stay rich and those that are up and coming are surely going to have to struggle their way to the top by going DIGI-biz because the rich can afford too. Timeline strategy, measure, quantify in order to set the amount concerned and to have a reason for the informed decisions of Section 6a when symptoms show to be applied since the power is there to impose it - use it when necessary not on a launch.

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1 year ago
Toni
Appalling. Is IRD consulting with iwi and looking at the Te Tiriti o Waitangi on this? I'm sure some of the principles are being breached there in regards to this question. This is very heavy handed Government fascist state behaviour that is being outlined and I do not like it at all.

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1 year ago
Rebecca P
These suggestions actually shocked me. Wow, this set of statements comes across as heavy-handed and actually a little scary. Surely, you can't seriously be considering punishing people for failing to use digital channels? That you are considering this, shows how out of touch the government is with the diversity of taxpayers and all their various situations and needs. Breathtakingly arrogant.

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1 year ago
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