Overview

(Clauses 15, 60, 74, 87, 88(11) and (12), 100(2), (5) and (6), 101, 102, 103(2) and (3), 104, 106, 107, 108, 109, 110, 111, 112, 114, 115, 116, 117, 120, 121, 123, 124, 125, 126, 127, 128 and 129)

In June 2010, the Government released the discussion document and online consultation forum Making tax easier. The intention of the proposed changes was to support the Government’s goal of a tax system that supports innovation and growth, without imposing unnecessary compliance costs upon taxpayers. With this in mind, the discussion document and forum outlined several proposals to reform the way tax is administered. The key proposals were to:

• reduce the use of paper forms in administering the tax system and increase online services and technology, including a proposal to mandate the use of electronic services;
• reform the PAYE and personal tax summary process, including a proposal to make PAYE a final tax for many taxpayers; and
• introduce a new framework for sharing information, where appropriate and with safeguards, with other government agencies.

While generally supportive of the overall objective to make tax administration more efficient by making greater use of online services, submissions were not supportive of the proposals to mandate their use, or of the proposal to make PAYE a final tax.

The proposed changes in the bill take into account the views expressed by submitters, while still aiming to achieve the Government’s goals for an efficient, innovative tax system. The proposals include:

• requiring taxpayers who choose to file a tax return to file tax returns for the previous four years as well as for the current year;
• removing the requirement for taxpayers to file an income tax return merely because they receive Working for Families;
• amalgamating the two main income tax return forms (the PTS and the IR 3 forms);
• allowing the Commissioner of Inland Revenue to authorise data storage providers to store their clients’ tax records offshore, and being able to revoke any such authorisation; and
• allowing taxpayers who submit their returns electronically to store them electronically.

Overall, these proposals should reduce compliance costs for businesses and individuals, while helping Inland Revenue to achieve its goal of delivering the bulk of its services online in the future. The proposals will also be supplemented by an internal strategy aimed at moving taxpayers to electronic services.

As part of Inland Revenue’s drive for greater efficiency across Government, the new information-sharing framework raised in the discussion document Making tax easier was included in the recently enacted Taxation (Tax Administration and Remedial Matters) Act 2011.