Taxation (Annual Rates for 2020-21, Feasibility Expenditure, and Remedial Matters) Bill

2.1. Are there any publicly available inquiry, review or evaluation reports that have informed, or are relevant to, the policy to be given effect by this Bill?

YES

A supplementary commentary on the Bill covering the additional policy proposals in the Supplementary Order Paper is available at https://taxpolicy.ird.govt.nz/publications/2020-commentary-arferm-bill-supplementary/overview The supplementary commentary provides a more detailed explanation of the proposed legislative changes in the Supplementary Order Paper.

2.2. Does this Bill seek to give effect to New Zealand action in relation to an international treaty?

NO

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2.3. Were any regulatory impact statements provided to inform the policy decisions that led to this Bill?

YES

A regulatory impact assessment was prepared for the unclaimed money proposals in the Supplementary Order Paper and is available at https://taxpolicy.ird.govt.nz/publications/type/regulatory-impact-assessment and https://treasury.govt.nz/publications/legislation/regulatory-impact-assessments:

• Review of Unclaimed Money Act, Inland Revenue, 24 April 2020.

The auto-calculation write-off threshold proposal is exempt from the RIA requirements, as the proposed change results in little or no change to the status quo legislative position.

2.3.1. If so, did the RIA Team in the Treasury provide an independent opinion on the quality of any of these regulatory impact statements?

NO

The regulatory impact statements for this Supplementary Order Paper did not meet the threshold for requiring an independent opinion on their quality from the Treasury’s Regulatory Quality Team. In addition, the proposals did not present additional fiscal costs.

2.3.2. Are there aspects of the policy to be given effect by this Bill that were not addressed by, or that now vary materially from, the policy options analysed in these regulatory impact statements?

NO

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2.4. Has further impact analysis become available for any aspects of the policy to be given effect by this Bill?

NO

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2.5. For the policy to be given effect by this Bill, is there analysis available on:

(a)    the size of the potential costs and benefits?

YES

(b)   the potential for any group of persons to suffer a substantial unavoidable loss of income or wealth?

NO

These documents provide an analysis of the size of the potential costs and benefits for the policy items included in the Supplementary Order Paper:

• Regulatory impact assessment Review of Unclaimed Money Act, Inland Revenue, 24 April 2020, available at https://taxpolicy.ird.govt.nz/publications/2020-ria-unclaimed-money/overview
• Cabinet paper LEG-20-SUB-0065 –Tax Administration (Write Off Amount) Order 2020 and tax policy report IR2020/204: Raising the automatic write-off threshold for qualifying individuals from $50 to $200, Inland Revenue, 30 April 2020. Will be proactively released.

2.6. For the policy to be given effect by this Bill, are the potential costs or benefits likely to be affected by:

(a)    the level of effective compliance or non-compliance with applicable obligations or standards?

NO

(b)   the nature and level of regulator effort put into encouraging or securing compliance?

NO

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3.1. What steps have been taken to determine whether the policy to be given effect by this Bill is consistent with New Zealand’s international obligations?

Unless it has been specifically identified in the development of the policy that there may be relevant international obligations, there have been no formal steps to determine whether the policy to be given effect by this Bill is consistent with New Zealand’s international obligations.

3.2. What steps have been taken to determine whether the policy to be given effect by this Bill is consistent with the principles of the Treaty of Waitangi?

Unless it has been identified in the development of the policy that there may be implications for the rights and interests of Māori protected by the Treaty of Waitangi, no formal steps have been taken to determine whether the policy to be given effect by this Supplementary Order Paper is consistent with the principles of the Treaty of Waitangi.

Under the generic tax policy process, there is focus on consultation (both with Māori and non-Māori interested parties) during the development of the relevant policy measures contained in the Supplementary Order Paper. This is directly in line with the “duty to consult” principle of the Treaty of Waitangi.

3.3. Has advice been provided to the Attorney-General on whether any provisions of this Bill appear to limit any of the rights and freedoms affirmed in the New Zealand Bill of Rights Act 1990?

NO

No advice has been provided to the Attorney-General on this Supplementary Order Paper. Advice provided on the original Bill can be accessed on the Ministry of Justice’s website at https://www.justice.govt.nz/justice-sector-policy/constitutional-issues-and-human-rights/

3.4. Does this Bill create, amend, or remove:

(a)    offences or penalties (including infringement offences or penalties and civil pecuniary penalty regimes)?

YES

(b)   the jurisdiction of a court or tribunal (including rights to judicial review or rights of appeal)?

NO

The Supplementary Order Paper to the Bill will repeal section 13 of the Unclaimed Money Act 1971. Section 13 is comprised of two subsections, as follows:

• Section 13(a) makes it an offence for a holder of unclaimed money to fail to:

–          keep a register of unclaimed money;

–          notify the Commissioner of Inland Revenue and unclaimed money owners of entries in the holder’s register of unclaimed money;

–          transfer unclaimed money to the Commissioner;

–          comply with a condition of an exemption granted by the Commissioner for the requirements above.

• Section 13(b) makes it an offence for a director, manager, secretary or other officer of the holder who authorises or permits a failure to comply

As the requirement to hold a register will be removed under the current proposals, the need for a section making a failure to hold a register can similarly be repealed.

3.4.1. Was the Ministry of Justice consulted about these provisions?

NO

The proposals do not have any implications for the Ministry of Justice.

3.5. Does this Bill create, amend or remove any provisions relating to the collection, storage, access to, correction of, use or disclosure of personal information?

YES

Section 6 of the Act requires holders of unclaimed money to maintain a register of unclaimed money, and to make this register available to the public for inspection. The Supplementary Order Paper repeals this requirement, with the intention of preserving the privacy of owners of unclaimed money.

The Supplementary Order Paper allows unclaimed money holders to provide Inland Revenue with any relevant information relating to the owners of unclaimed money to assist Inland Revenue in locating the owners of the unclaimed money. Additionally, the Supplementary Order allows Inland Revenue to use existing tax information to assist in matching owners of unclaimed money with their money.

3.5.1. Was the Privacy Commissioner consulted about these provisions?

YES

The Office of the Privacy Commissioner was consulted on, and agreed, to the proposals included in the Supplementary Order Paper.

3.6. Has there been any external consultation on the policy to be given effect by this Bill, or on a draft of this Bill?

YES

Inland Revenue officials released a tax policy consultation document Unclaimed money in January 2020 for public consultation. Submissions were received from a range of individuals and groups, including the New Zealand Law Society, Chartered Accountants Australia and New Zealand, and the New Zealand Bankers’ Association.

Consultation on the auto-calculation write-off threshold increase was also held, with feedback received from Chartered Accountants Australia and New Zealand and the National Beneficiary Advocacy Consultation Group.

3.7. Have the policy details to be given effect by this Bill been otherwise tested or assessed in any way to ensure the Bill’s provisions are workable and complete? 

NO

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4.1. Does this Bill contain any provisions that could result in the compulsory acquisition of private property?

YES

The Supplementary Order Paper places a limitation period of 60 years on the ability of a claimant to claim unclaimed money. While this removes a property right, it also reflects the reality that the likelihood of unclaimed money being claimed decreases as time passes. Furthermore, it is impractical for the Crown to retain unclaimed money as a contingent liability on its accounts indefinitely.

However, Inland Revenue’s ability to use its existing tax information to match owners of unclaimed money with their money will result in a greater number of unclaimed money owners being reunited with their money, and fewer amounts of unclaimed money going unclaimed.

4.2. Does this Bill create or amend a power to impose a fee, levy or charge in the nature of a tax?

NO

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4.3. Does this Bill affect rights, freedoms, or impose obligations, retrospectively?

YES

Increasing the automatic calculation threshold to remove taxpayers’ obligations to pay small amounts of tax has application to the 2019–20 income year only. This measure is taxpayer friendly and is part of the Government’s COVID-19 response to ensure that taxpayers are not required to pay relatively small amounts of tax in a year when they may have other financial pressures. Although the proposal is technically retrospective, it practically applies to payment demands which will be issued in the current tax year as the auto-calculation process is undertaken.

4.4. Does this Bill:

(a)    create or amend a strict or absolute liability offence?

NO

(b)   reverse or modify the usual burden of proof for an offence or a civil pecuniary penalty proceeding?

NO

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4.5. Does this Bill create or amend a civil or criminal immunity for any person?

NO

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4.6. Does this Bill create or amend a decision-making power to make a determination about a person’s rights, obligations, or interests protected or recognised by law, and that could have a significant impact on those rights, obligations, or interests?

NO

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4.7. Does this Bill create or amend a power to make delegated legislation that could amend an Act, define the meaning of a term in an Act, or grant an exemption from an Act or delegated legislation?

NO

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4.8. Does this Bill create or amend any other powers to make delegated legislation?

NO

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4.9. Does this Bill contain any provisions (other than those noted above) that are unusual or call for special comment?

NO

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