21 Sep 2016

Accountants protest 'get out of jail free' tax law change

1:31 pm on 21 September 2016

The government has been criticised for trying to give itself an "out" clause in a proposed tax bill aimed at simplifying tax processes and making foreign trusts more transparent.

Caucus run 21/07/15

Revenue Minister Michael Woodhouse Photo: RNZ / Alexander Robertson

MPs hearing submissions on the legislation have been told a late change by Revenue Minister Michael Woodhouse provides a "get out of jail free" card.

The change - introduced while the bill was open for public submissions - gives the minister regulation-making power to resolve any issues that could arise while Inland Revenue changes its software platform.

Corporate Taxpayers Group spokesperson Patrick McCalman said it should be withdrawn and put through proper consultation.

"This could be used as a 'get out of jail free' [card] for poor design and poor implementation of the system, and that can't be right.

"We've got to get it right. We've got to make the system comply with the law and it shouldn't be the other way around."

Chartered Accountants Australia and New Zealand tax team leader Peter Vial said he was appalled at the scope of the regulation-making power.

"As it's drafted now, the minister would be able to make regulations that change, for example, the commissioner's search and seizure powers, the penalties rules, the rules that apply to rulings, or the rules allowing Inland Revenue to share information with other government departments. Doing that - all of that - without reference to Parliament," he said.

"We think the scope's way too broad and needs to be narrowed."

Mr Vial said, overall, the bill made sensible and pragmatic changes, particularly regarding the disclosure rules for foreign trusts.

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