Often provisions in the Inland Revenue Acts can be ambiguous, unclear and inconsistent with other provisions

The changes in the Taxation (Annual Rates for 2019-20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 provides more flexibility as to how the previously mentioned issues are dealt with. Effective 26 June 2019, the Minister of Revenue or the Commissioner of Inland Revenue can now modify or make exemptions temporarily to the Inland Revenues Acts to benefit taxpayers at their choice. To have effect, the new powers must be exercised by the Minister of Revenue recommending an Order in Council to the Governor-General, or by the Commissioner granting exemption from provisions of Inland Revenue Acts.

Are we giving them too much power?!

While in some respects this may seem practical, it is against general principles of law. This passes significant power to the Commissioner and the Commissioner is not an elected representative.

To recognise this, taxpayers affected by the changes can choose to accept or reject any modification or exemption. The rules will be effective to a maximum of 3 years after created but some may apply retrospectively. Taxpayers are also allowed to raise issues with Inland Revenue as they see appropriate. The suggestions then get passed to a specialist team to determine whether it is appropriate to use the legislative modification power.

On another note, the use-of-money-interest rates on under paid and over paid tax have changed, supposedly, to ensure they are staying in line with the market interest rates. There has been a bit of media comment on this point as the underpayment rate is increasing even though the general interest environment appears to be decreasing.

The underpayment rate increased from 8.22% to 8.35% and the overpayment rate decreased from 1.02% to 0.81%.