Open­ing the door to In­land Rev­enue


Con­sul­ta­tions are ex­pected to kick off in the next few days on a big shake-up to the per­sonal tax sys­tem.

The In­land Rev­enue sug­gested in 2015 in­tro­duc­ing a new re­quire­ment for all Ki­wis to check and con­firm an on­line state­ment once a year, to en­sure they did not have in­come that had missed the tax­man.

That would end a sit­u­a­tion where some reg­u­lar wage-earn­ers have not had to have any deal­ings with the tax de­part­ment since uni­ver­sal tax re­turns were aban­doned in the 1990s. The pos­si­ble new re­quire­ment may be one of the rule changes can­vassed in a dis­cus­sion doc­u­ment about to be re­leased by Rev­enue Min­is­ter Ju­dith Collins.

The de­part­ment has been con­cerned tax­pay­ers are ‘‘cher­ryp­ick­ing’’ by fil­ing a tax re­turn or re­quest­ing a per­sonal tax sum­mary in years when they think they are due a tax re­fund, but not do­ing so when that might mean they had ad­di­tional tax to pay.

It has ar­gued that mak­ing peo­ple look over an an­nual state­ment would re­store fair­ness to the tax sys­tem and stop peo­ple be­ing ‘‘forced into a gam­ble’’ over whether to re­quest a tax sum­mary. But it is not clear In­land Rev­enue will get its way.

For­mer rev­enue min­is­ter Michael Wood­house said last year it could not be as­sumed manda­tory checks of per­sonal tax sum­maries would go ahead.

Tax­pay­ers Union ex­ec­u­tive di­rec­tor Jor­dan Wil­liams said if it did, it would be a back­wards step to the 1970s.

‘‘We’re call­ing on po­lit­i­cal par- ties across the spec­trum to rule out uni­ver­sal tax re­turn fil­ing as part of their elec­tion man­i­festos,’’ he said.

‘‘Of­fi­cials may like it, but the po­lit­i­cal con­sen­sus on New Zealand hav­ing a low com­pli­ance cost regime should be closely guarded..’’

In­land Rev­enue has main­tained that any re­quire­ment to check a tax sum­mary would not be like fil­ing a tax re­turn, as for the ‘‘vast ma­jor­ity’’ of tax­pay­ers no ac­tion would be re­quired other than look­ing at a pre-filled form.

The pro­posed sum­maries should be much more ac­cu­rate than those sent out at present, as a re­sult of a new com­puter sys­tem be­ing in­tro­duced as a re­sult of In­land Rev­enue’s Busi­ness Trans­for­ma­tion project.

A con­sul­ta­tion pa­per was likely to be re­leased shortly but an ex­act date was yet to be con­firmed.

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