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Administrative flexibility

Do you support providing the Commissioner with greater administrative flexibility in limited circumstances?

The Commissioner currently has limited administrative flexibility to deal with situations when the interpretation of the law (applying ordinary statutory interpretation principles) does not accord with the policy intent.  The Commissioner cannot ignore or not apply the law as interpreted by her.  This is because, as a matter of constitutional law, only Parliament has the ability to impose (or suspend) taxes.  While a legislative amendment can be sought to remedy the issue, this may not necessarily avoid the Commissioner and taxpayers having to commit resources to the issue.

As a starting point for discussion, the proposal is that the Commissioner would be able to:

  • Apply a policy-based approach to small gaps in the tax legislation;
  • Deal pragmatically with legislative anomalies that are minor or transitory;
  • Address cases of inequity at the margins; or
  • Deal with cases in which a statutory rule is difficult to formulate.

Questions

1.  Do you have any concerns about any of the criteria listed above?  Which of the above criteria will be most useful for taxpayers?

2.  Do you have any better criteria for providing the Commissioner with greater administrative flexibility?

3.  What limitations do you think should be placed on the use of any further power given to the Commissioner to interpret the law?

Comments

David Snell
Commissioner's approach to 'care and management' has long been too narrow. Great that she's prepared to open up the debate and potentially move to a more liberal approach.

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  • agree3
  • disagree9
8 months ago
Steve Dent
The Tax Administration Act 1994 (TAA), in its current form, gives the Commissioner (CIR) very broad and substantial powers - and a good number of those may be used at her discretion. Unfortunately, these create plenty of legislative "grey areas" where both the "process" and the "outcome" for a taxpayer may not always play out as intended by Parliament. There are lots of reasons why this is - but none more important than the resulting "unfairness" it creates for the taxpayer. Accordingly, I believe the TAA should be revamped, but every effort should be made to simplify the interpretation of the legislation and eradicate the "grey areas" so the legislative intentions of Parliament are crystal clear and easily definable to both the CIR and the taxpayer. If however the intended revamp of the TAA is to bestow even further discretion on the CIR's powers - then I believe this will be a large mistake.

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  • agree8
  • disagree6
8 months ago
MichaelAngelo
IRD sees itself as enforcing the law but not themselves being bound by it which should be very worrying to those who believe that we live in a Western Democracy. The Student Loan Act spells out duties and obligations for both parties but if IRD really stuffs up they do not see it as their responsibility to put it right even though the Act clearly spells out that the Commissioner does have the discretion where unfairness has occurred. Worse we have encountered extraordinary prejudice against Student Borrowers assuming they must be guilty of something, as part of a government crackdown and if you are not happy they readily pass you onto to the Ombudsman who has so many complaints that they do not have time to consider your case!

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  • agree7
  • disagree8
8 months ago
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