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Inland Revenue

Tax Policy

Appendix A

Terms of reference

The Finance and Expenditure Committee resolved to conduct an inquiry into the powers and operations of the Inland Revenue Department on 3 March 1999, with the following terms of reference:

(a)    To review the powers of the Commissioner of Inland Revenue to assess and collect income tax pursuant to the Tax Administration Act 1994 and other relevant Acts and to assess whether these powers are justified.

(b)    To review the Inland Revenue Department’s application of the compliance and penalties regime established under the tax Acts, including the process by which and the rate at which use of money interest is set, and also the simultaneous application of compounding late penalty payments.

(c)    To review the debt management practices and the adequacy of the powers of the Inland Revenue Department to remit tax liabilities or enter into arrangements for deferring the payment of tax and the department’s operation of its powers.

(d)    To examine the feasibility and desirability of establishing a tax ombudsman to investigate taxpayer complaints.

(e)    To review whether the structure, operation and culture of the Inland Revenue Department, and its understanding of the law, have affected the department’s application of the compliance and penalties regimes and the service it provides to taxpayers and their agents.

Approach to inquiry

We invited certain organisations to make submissions on the inquiry. We also called for public submissions with a closing date of 30 April 1999. Hearing evidence took 52 hours, including over 12 hours from the department. We spent a further nine hours in consideration. We received 188 public submissions on the inquiry from the organisations and individuals listed in Appendix B. We heard 53 submissions in public.

Committee members

Hon Peter Dunne (Chairperson)
Belinda Vernon (Deputy Chairperson)
Mrs Jenny Bloxham
Hon Dr Michael Cullen
Ruth Dyson
Hon Peter Gresham
Rodney Hide
Alec Neill
Rt Hon Winston Peters
Mark Peck
Ian Revell
John Wright

Committee staff

Nick Aldous
Ainslie Rayner
Louise Sparrer