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Inland Revenue

Tax Policy

PUBLISHED 3 December 2001

Tax bill introduced

The Government today introduced the Taxation (Relief, Refunds and Miscellaneous Provisions) Bill, which brings in new rules for the administration of tax debt. Other changes relate to transfers of overpaid tax, over-taxation of unit trusts, holiday pay tax issues when businesses are sold, and tax simplification. Also covered are the GST treatment of warranty payments from offshore warrantors and GST deductions for non-profit bodies. The bill also closes a loophole in the petroleum mining rules, a change that is effective from today.

For more information on these and other matters in the bill see the Government's media release and our 86-page commentary on the bill. A copy of the bill is also available in PDF format.

Hon Dr Michael Cullen
Minister of Revenue


Govt moves on taxpayer financial relief, loopholes, compliance costs

Legislation introduced today will give the IRD greater flexibility in dealing with taxpayers' debt problems, provide fairer instalment arrangements for repaying debt, and clarify what constitutes "serious hardship".

Revenue Minister Michael Cullen said the changes were a response to concerns in the Finance and Expenditure Committee 1999 inquiry into the powers and operations of Inland Revenue that taxpayers were getting into uncontrollable tax debt.

"The new rules seek to strike a balance between being too lenient and too harsh as both discourage voluntary compliance with the law.

"The bill also closes a loophole that allows petroleum miners to claim tax deductions for more than they invested. That change comes into effect from today. Another revenue protection measure in the bill, relating to unit trusts, was announced last month," Dr Cullen said.

Other major features of the Taxation (Relief, Refunds and Miscellaneous Provisions) Bill are:

  • new rules for the transfer of overpaid tax within a taxpayer's account or to another taxpayer;
  • changes to prevent the over-taxation of unit trusts;
  • clarification of holiday pay tax issues when businesses are sold;
  • removal of the potential double impost of GST under certain warranty arrangements with non-residents, to assist importers of motor vehicles and other goods under warranty;
  • clarification of the law to ensure that charities and other non-profit bodies can claim GST refunds on all their activities except exempt supplies, such as the sale of donated goods and services, thus creating greater certainty and reducing compliance costs;
  • further measures for simplifying the tax system and reducing taxpayer compliance costs.

Full information on these and other matters in the bill can be found in the commentary published on the website of the Policy Advice Division of Inland Revenue at

Contact: Patricia Herbert [senior press secretary] 471-9412 or 021-270-9013. Technical inquiries to Michelle Davie 471-9728