Why Oppose the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Bill
Framed as simplification — in substance, consolidation of executive power.
This Bill presents as an administrative clean-up but functions as a structural shift of power away from Parliament and toward the Revenue Minister and Inland Revenue. It blends routine tax updates with sweeping powers over privacy, delegation, and rate-setting — using complexity to conceal control.
Below is what the Bill does, why it matters, and how it quietly redefines the balance between the citizen, Parliament, and the tax authority.
Principles at Stake
- Parliamentary sovereignty: Only Parliament should set core tax rates and entitlements. Delegating this to the Commissioner or Cabinet erodes fiscal accountability.
- Privacy and due process: Citizens’ tax data must not be shared across agencies without clear limits, consent, or judicial oversight.
- Rule of law: Tax rules must be clear, predictable, and not applied retrospectively.
- Transparency and equity: The same Bill that repeals trust-disclosure rules expands state data collection — a contradiction that weakens fairness.
- Democratic accountability: Complex omnibus tax bills cannot serve as vehicles for major structural reform without consultation or separate scrutiny.
What the Bill Really Does
- Delegates taxation powers: Allows the Commissioner of Inland Revenue to set deemed rates of return, interest, and benefit values by determination — bypassing Parliament.
- Expands data-sharing powers: Creates new s18HB under which Inland Revenue can routinely disclose taxpayer information to other agencies via Ministerial agreement.
- Applies rules retrospectively: Several provisions take effect from 1 April 2025, exposing taxpayers to liabilities under laws not yet enacted.
- Repeals trust disclosure provisions: Removes transparency requirements for trusts while leaving discretionary collection powers intact.
- Introduces complex “simplifications”: New regimes for joint ventures, employee share schemes, and foreign investment funds add elections, exceptions, and record-keeping burdens.
Why This Undermines the Rule of Law
- Delegated taxation is unconstitutional: Article 4 of the Bill of Rights 1688 affirms no tax may be levied except by Parliament. This Bill dilutes that safeguard.
- Unchecked executive access to data: Section 18HB allows “Ministerial agreements” to transfer information to enforcement and welfare agencies without warrant or publication of full terms.
- Retrospective legislation: Applying tax changes before passage violates legal certainty and legitimate expectation — principles affirmed in CIR v West-Walker [1954].
- Opacity over accountability: By repealing trust disclosures while enhancing IRD’s surveillance reach, the Bill hides wealth flows while monitoring citizens more closely.
- Procedural irregularities: The Departmental Disclosure Statement confirms no independent review, no Treaty analysis, and partial compliance with impact assessment standards.
Consequences if Enacted
- Parliament loses annual control over key fiscal levers such as deemed interest and benefit values.
- Inland Revenue becomes both tax assessor and inter-agency intelligence hub, without external oversight.
- Citizens may face retrospective liabilities and expanded data exposure with no legal remedy.
- Public transparency over trusts and wealth ownership decreases even as surveillance expands.
- Complexity and compliance cost will rise sharply for small enterprises, the very groups “simplification” claims to help.
What Real Reform Would Require
- Separate annual rates from structural reform: Limit each bill to rate-setting; debate major powers in standalone legislation.
- Reinstate parliamentary control: Require that all tax-rate and benefit determinations be approved by Parliament, not issued by determination.
- Restrict data sharing: Delete s18HB or confine disclosures to anonymised, non-identifiable data with independent oversight.
- Preserve transparency: Retain trust disclosure rules until a clear, privacy-compliant alternative exists.
- Guarantee clarity: Replace retrospective clauses with forward-dated commencement and plain-language guidance.
- Full rights review: Subject any new administrative powers to a NZ Bill of Rights and Privacy Act compliance certification.
If You Care About Accountability, Privacy, and the Rule of Law
This Bill is not about simplification — it is about consolidation. It shifts control of taxation and information from the public’s representatives to appointed officials. It hides discretion within technical clauses and calls the result “efficiency.”
If you believe Parliament must remain the guardian of taxation,
If you believe privacy is a right, not a convenience,
If you believe law must be clear, not retroactive,
Then this Bill must be opposed.
“Complexity is the camouflage of control.” — Ukes Baha
Read the full submission:
Formal Opposition to the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Bill