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Tax secrecy or taxpayer confidentiality?

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While the tax secrecy rule increasingly causes tension for Inland Revenue, a starting principle that taxpayer information should be confidential is a longstanding element of New Zealand tax law and is consistent with international practice.  The Government does not therefore propose to step completely away from the concept.

Inland Revenue is perhaps unique in the quantity and breadth of information it holds. It collects and holds information on virtually all New Zealanders, and most corporate and other entities, such as trusts and partnerships.  In some cases the information can be sensitive, particularly in the commercial context.

 The current tax secrecy rule covers all matter relating to the Inland Revenue Acts and is therefore not limited to taxpayer-specific information.  In Australia, Canada and the United States, the information subject to tax secrecy is much narrower, being generally limited to information that would identify (directly or indirectly) the taxpayer to whom it relates.

The Government proposes to narrow the ambit of the secrecy rule so that it only applies to information that would directly or indirectly identify a taxpayer.

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