Date posted: 26/04/2022

Submission on tax administration in a digital world

CA ANZ provided feedback on IR’s officials’ issues paper Tax administration in a digital world.

In brief

  • CA ANZ supports the initiative to establish a fully digital tax system
  • The suggestion that IR should be the ‘source of truth’ of data in the tax system requires more thinking
  • Tax agents and other intermediaries should continue to be an integral part of NZ’s tax administration system

The issues paper sets out the case for a fully digital tax system. It covers specific areas that officials would like feedback on, including:

  • The regulatory framework applying to external parties, including intermediaries and other entities which interact with the tax and payments system.
  • The rules, frameworks and scope of data sharing.
  • How tax legislation could support a more digital future.

CA ANZ supported the initiative. However, in CA ANZ’s view, there is a tension between the desire to embed tax in natural (business) systems and the view of the issues paper that Inland Revenue should be the key source of data.

Key CA ANZ recommendations include:

  • What Inland Revenue considers to be included within "natural systems" be specified to avoid any potential confusion between relevant parties.
  • Accuracy should be added as a pillar of the framework for the future tax administration system.
  • Rights and obligations of intermediaries should be commensurate with the level of access they have to the system. Taxpayers and intermediaries should only be accountable and expected to verify information they have provided or have knowledge of. 
  • Digital elements be included as a matter of course in tax policy development, tax legislation, and Inland Revenue operational processes and policies, rulings and audit/assurance.

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