The TAA contains offence provisions for both Inland Revenue officers and certain other persons who fail to maintain secrecy. The Government proposes to retain a similar penalty for Inland Revenue officers who knowingly breach the proposed confidentiality rule. The retention of a penalty will confirm the ongoing importance of confidentiality.
The current rules are less clear in relation to other persons who have access to, or receive, Inland Revenue information. In many circumstances people with access to Inland Revenue information are required to sign secrecy certificates; however, this does not apply in all cases. Additionally, in a world of ever-expanding information sharing, the administration of secrecy certificates for every person who will come into contact with Inland Revenue information may be logistically difficult.
Agreements between Inland Revenue and agencies with whom information is shared contain clauses regulating the use of information. For example, the agreement between Inland Revenue and New Zealand Police contains provisions regarding the security, use and disclosure of information shared. It also provides for processes in the event of a breach, including permitting the suspension of information sharing while breaches are investigated. These are important provisions and will continue to feature in such agreements.
The Government recognises that tax information can be very sensitive, and its receipt should come with particular obligations. In Australia the comparable legislation provides that confidentiality follows the information, and therefore anyone who obtains protected information and then discloses it otherwise than in accordance with the legislation, commits an offence. This is, in effect, a clearer and more consistent application of the current rule.
The Government proposes the rule be simplified to state that anyone with access to information subject to the confidentiality rule who knowingly and improperly discloses the information, be subject to a penalty. This would be the same as the current penalty for both Inland Revenue officers and others with access to Inland Revenue information which is imprisonment for a maximum of six months, a maximum fine of $15,000, or both.