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Inland Revenue

Tax Policy

PUBLISHED 25 October 2007

Parliament passes Income Tax Bill

Parliament today passed the Income Tax Bill, which completes the 15-year rewrite of the New Zealand's income tax law. The bill, which is nearly 3000 pages long, contains the rewritten Income Tax Act from Part F to the end of the Act, including Schedules. It also re-enacts and consolidates Parts A to E of the Act, and renumbers various sections contained in those Parts. Once enacted, the resulting Income Tax Act 2007 will apply to income derived from the 2008-09 income year. For more information see the government's media statement.

Hon Dr Michael Cullen
Minister of Finance

Hon Peter Dunne
Minister of Revenue


Government welcomes passage of Income Tax Bill

Finance Minister Michael Cullen and Revenue Minister Peter Dunne have welcomed the historic passage today of the nearly 3000-page Income Tax Bill, which rewrites New Zealand's income tax law.

"The passage of the Income Tax Bill is the culmination of 15 years' work to rewrite the Income Tax Act, a massive achievement for the many people who have been involved in the project over the years," they said.

"The purpose of rewriting the Income Tax Act was to produce tax law that is clear, written in plain language and is structurally consistent. That makes it easier for users to find what they need, to understand it, and to apply it, which in turn helps them to comply with the law.

"Where possible, the language of the law has been made more concise, legalese has been avoided, and archaic terms have been removed or replaced.

"For example, a 14-line sentence has been broken up into three easily understandable subsections, and terms like 'hereinbefore' and 'hereinafter' have been rightly culled or replaced with modern language.

"In the process of rewriting the Act, great care has been taken to ensure that the original intention of the legislation has been retained. The few intended changes that been made have all been presented for public consultation over the years.

"The rewrite of the Income Tax Act has been carried out in the Policy Advice Division of Inland Revenue by a small team of public and private sector drafters and analysts.

"The work has been overseen by an advisory panel that includes members of the New Zealand Institute of Chartered Accountants and the New Zealand Law Society.

"The advisory panel has been chaired in recent years by Sir Ivor Richardson, who replaced Mr Colin Blair in 2003. We thank them for the splendid work of the panel over the years.

"In a speech to the Law Commission last year, the Rt Hon Sir Geoffrey Palmer said of the rewrite: 'The most innovative accomplishment in New Zealand tax law has been the rewriting of the tax legislation in user-friendly language and easy-to-use format. That sounds a simple enough process, but it was so difficult that Australia gave up on it…. The whole process has been accomplished in New Zealand without much fuss and with modest expense. It is a considerable achievement.'

"Yes, and we extend our congratulations to the many people who have worked so hard to produce these results," Dr Cullen and Mr Dunne said.

Bryan McDaniel, press secretary, 04 471 9412 or 021 270 9013
Ted Sheehan, press secretary to Peter Dunne, 04 470 6985 or 021 638 920