(Government Bill 199–1, Simon Watts)
From: Ukes Baha | 21 October 2025
Submitted in response to the Committee’s call for submissions on the Bill
This submission opposes the Bill in its entirety.
It is constitutionally defective, substantively unsound, and procedurally irregular.
The measure exceeds its stated purpose of “annual rates and compliance simplification” and instead restructures the tax administration framework in ways that erode parliamentary control, authorise broad executive discretion, and diminish taxpayer privacy and legal certainty.
The Bill transfers key rate-setting and benefit-determination powers from Parliament to the Executive and, in several cases, directly to the Commissioner of Inland Revenue.
Examples include:
These powers have long been reserved to Parliament as the custodian of taxation. Their transfer by secondary instrument contravenes the principle expressed in Article 4 of the Bill of Rights 1688 and reaffirmed in Fowler v Attorney-General [1987] 1 NZLR 617, that “no taxation may be imposed except by Parliament.” Delegating them to the Commissioner removes democratic accountability for fiscal settings.
The Departmental Disclosure Statement confirms:
Where a Bill alters privacy, data-sharing, and residency law, such omissions are material. They preclude informed consent by Parliament and breach Cabinet Office Circular CO (21) 2 on legislative standards.
New section 18HB of the Tax Administration Act 1994 establishes ongoing inter-agency disclosure under Ministerial agreement. Unlike existing s 18F frameworks, these agreements are not limited to specific purposes, are not disallowable instruments, and lack external oversight. The Privacy Commissioner formally objected to this structure, noting the unjustified disapplication of principles 10 and 11 of the Privacy Act 2020.
If enacted, Inland Revenue may lawfully transmit identifiable taxpayer data to enforcement or welfare agencies without consent or warrant. That outcome is inconsistent with s 21 NZ Bill of Rights Act 1990 and with the common-law principle against unreasonable search or seizure.
Multiple clauses apply retrospectively to 1 April 2025 (Revenue Account Method for FIFs; crypto-asset adjustments; certain GST validations). Retrospective taxation offends the rule of law unless clearly justified in the public interest and accompanied by taxpayer protection. No such justification is given.
Taxpayers who filed under the law as it stood will have their positions altered without warning. The Crown Law Office has previously cautioned against such retrospectivity except to correct manifest error (Cabinet Manual 2023, s 7.67).
The Bill’s combined effect of repealing trust-disclosure rules (s 59BA/BAB) while enlarging IRD’s external data-sharing powers expands surveillance over citizens while diminishing scrutiny of private wealth structures. This inversion of transparency undermines equity and due process. Inland Revenue becomes both data collector and secret holder, without judicial or parliamentary control.
The Bill inserts dense technical regimes — notably the Revenue Account Method, flow-through joint-venture rules, and employee share scheme deferral mechanisms — each creating new elections, deadlines, and ring-fenced accounts. Such complexity is incompatible with the rule that fiscal obligations be knowable in advance and comprehensible to the ordinary taxpayer. The courts have repeatedly emphasised clarity as a constitutional value in taxation (CIR v West-Walker [1954] NZLR 191).
The Bill is not a legitimate “annual rates and compliance” instrument. It is a structural rewrite that centralises fiscal and surveillance authority within the Executive branch, weakens Parliament’s control over taxation, and introduces retrospective liabilities under the cover of technical amendment.
It fails the standards of legality, necessity, and proportionality required of taxation legislation in a constitutional democracy.
Respectfully submitted,
Ukes Baha
Public Health Advocate | Counsellor | Policy Analyst
ukesbaha.com