Tax administration refers to the rules and processes which govern how Inland Revenue should operate when collecting and distributing tax and other payments. The effectiveness of these rules and processes is just as important for maintaining fairness in the tax system as the rules defining how much tax is due. Achieving our goal of developing a better, more resilient and responsive tax system for New Zealand involves more than simply updating the computer system. We have taken the opportunity to look at the way tax is administered to determine what needs to change to meet the challenges of the 21st century.
To ensure the tax system can support the Governmentâ€™s wider objectives, including the delivery of better public services, changes are proposed to:
- clarify the Commissionerâ€™s â€ścare and managementâ€ť responsibilities to allow for more administrative flexibility in limited circumstances in applying the law, and clarify how the responsibilities apply to the non-tax functions such as administration of student loans and Working for Families
- clarify Inland Revenueâ€™s ability to access remotely stored information and bulk third-party information while maintaining the requirement that information collected must be necessary and relevant to administering tax
- update the current secrecy rule â€“ which restrains the use of tax specific information â€“ from covering all tax information to just information that identifies, or could identify a taxpayer
- consider whether taxpayers should be able to consent to the release of their information in certain circumstances
- establish the self-assessment mechanisms when pre-population and automated supply of information through accounting systems is introduced
- introduce rules to clarify what an individual or small business has to do if they receive a pre-populated tax return or if they supply information to Inland Revenue automatically through their accounting system.
In addition to the specific proposals, feedback is sought on:
- how information could better be shared across government on the basis that commercially sensitive information would continue to be protected
- how the smarter use of technology may assist tax agents in their role and how this role may change in the future
- what else could change in the future administration as we progress with Making Tax Simpler, including the rules governing disputes and advice, the time bar and record keeping.
This website explains these proposals, and invites feedback. For a comprehensive explanation of these proposals, see the discussion document.