Simplification of the TAA

Historically IRD has held this information fairly tightly under the Secrecy obligations in the Tax Administration Act, and the principle that people will share more with IRD if it knows the information will be protected. However, the legislation has also worked against IRD in many cases, where information which did not identify an individual could not be shared, and in the past few years there appears to have been a political and social demand to share more information with other agencies. Under the existing Secrecy and Privacy rules, information programmes are slow, cumbersome and costly to introduce.

In December 2016, a consultation document (Making Tax Simpler – Proposals for Modernising the Tax Administration Act) was released by IRD. This includes proposals to narrow the confidentiality rule, but also introduce a new framework for the sharing of information, giving more flexibility for sharing tax information in a controlled way. However this will always be at the risk of privacy and confidentiality of information for individuals, over the wider public good of running an efficient government. On the plus side John Edwards the Privacy Commissioner has just last week recommended that the fine for serious breaches to the Privacy Act by public and private sector organisations increase to $1M which should encourage Privacy risks to be minimised.

Other proposals include changes to the way advice is given, including a reduction in the fees for obtaining a binding ruling, expanding the definition of tax agent, and providing the Commissioner more administrative ‘flexibility’ under the care and management provisions.

The consultation offers an in depth analysis on the issues around the proposals and have offered open consultation to anyone on their website. If you would like to have your say CLICK HERE to go to the site.