Good tax and social policy systems are an essential part of a fair, efficient and productive economy. Taxes raise money to finance government spending, which is essential if New Zealand is to provide the healthcare, education and other government services that its citizens expect. The tax system is therefore a major national asset.
Inland Revenue is also the agency that delivers a range of social policies such as child support, Working for Families, KiwiSaver and student loan repayments. These social policies help increase fairness and improve outcomes for New Zealanders.
The work of the department is governed by Acts of Parliament administered by Inland Revenue.
Our regulatory system responsibilities
Because of these various functions, Inland Revenue has responsibility for, or a major role in, seven regulatory systems:
- Revenue raising and collection (with two sub-systems: income tax and GST);
- Working for Families tax credits;
- Child support;
- Student loans;
- Paid parental leave; and
- Information sharing.
Descriptions of these regulatory systems are set out in Inland Revenue's Regulatory stewardship strategy.
Our view of good stewardship
The major feature of Inland Revenue’s approach to stewardship is that it is about holding itself to account and adapting and improving its systems so that the tax and social policy systems for which it has responsibility meet the needs of all stakeholders. It does this by developing policy and designing administrative processes which will which take into account developing and changing requirements.
What we are doing
Over the past two years, Inland Revenue has been engaged in a series of activities which provide a high-level view of the tax and social policy systems.
For administrative processes, Inland Revenue has embarked on a major modernisation of its business functions. After extensive public consultation, Inland Revenue has been progressively shifting all of its regulatory responsibilities from the old technology platform to the new one. As each is shifted, they have been examined for policy proposals to simplify and improve customer service. For more information see Inland Revenue’s Business Transformation.
The Tax Working Group was established by the Government to consider the entire tax and transfer system for ways to further improve fairness. Inland Revenue supported the work of the Working Group. The Group made 99 recommendations for improvements across the tax and transfer system.
Inland Revenue also worked alongside the Ministry of Social Development to support the work of the Welfare Expert Advisory Group who had been charged by the Government with recommending options for improving the social security system.
Using the Tax Working Group’s Final Report as a starting point, the Government's tax policy work programme was refreshed. The new work programme covers a range of different aspects of the tax system.
As part of the updated tax policy work programme, Inland Revenue has also updated its framework for engagement. Public consultation forms a central part of the Generic Tax Policy Process which is the basis for tax policy development in New Zealand.
A final aspect of Inland Revenue’s approach to stewardship is a review of individual regulatory systems. These more product-focused assessments are critical for ensuring the health and fitness-for-purpose of the systems and complement the broader system reviews described above.
Assessment of regulatory systems
Assessment helps us determine how well our regulatory systems are working, what we are doing well, and the changes we can make to do better.
The guiding framework for assessing regulatory systems is the Government expectations for good regulatory practice published by The Treasury.
The Government’s investment in Inland Revenue through Business Transformation and the organisation changes that have flowed from this give us an opportunity to rethink how we undertake regulatory system assessments. Business Transformation provides us with an increased ability to collate data to gain insights into different perspectives on the health of each system.
We have commenced this new approach with a review of the GST system. This is a pilot which will guide us in embedding regulatory practice into the organisation.
Once the GST review is complete, we will determine a programme of future assessments.
Last updated: November 2019