This operation targets some 400 wealthy New Zealanders and asks them to disclose a great deal of information about their affairs, much of which is irrelevant to their present tax obligations. The information is being sought under a new inquiry power which allows Revenue to seek information that it considers is relevant to the development of policy for the improvement or reform of the tax system.
The survey has generated much speculation as to the Government's motives and despite political denials there is little doubt from the flavour of commentary that the information being sought is intended to pave the way for an argument that wealthy people pay too little tax as a proportion of their economic income. Of course economic income is very different from taxable income under our present laws, so the upshot is very likely to be reform that includes taxing gains that are not presently within the tax net. Otherwise there is little point in the survey being undertaken.
Despite what IR asserts are protections, the survey process is intrusive and complicated. It requires information to be disclosed as to family members, entities (world-wide) in which families have interests and then financial disclosures for period form 2016 onwards. The survey is intended also to be a rolling exercise under which the target group will be required to update information every year.
The survey has serious implications in terms of the Bill of Rights Act, the Privacy Act, and the general limitations that the Courts have recognised apply to the IR's information gathering powers. Despite that, IR seems determined to progress the survey with a view to producing a report ahead of the 2023 general election.
Geoff Clews is acting alongside other advisers to assist targets of the survey with advice and guidance as to their responses and the extent to which the survey exceeds acceptable bounds of tax administration.