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Inland Revenue

Tax Policy

Chapter 3 - Information sharing

3.1 Information sharing agreements between government agencies require the privacy of individuals to be considered and balanced against the need for government agencies to provide efficient, high quality services.

3.2 In the case of organised criminal activity, the benefits to society of sharing the information outweigh the reduction in privacy of certain individuals and the risks to the voluntary compliance model on which our tax system is based.

3.3 For most government agencies, the Privacy Act 1993 regulates information sharing between agencies. Principle 11 of the Privacy Act 1993 limits the disclosure of personal information, but contains exceptions that permit disclosures when necessary “to avoid prejudice to the maintenance of the law” and “for the protection of the public revenue”. However, those exceptions do not apply to Inland Revenue. Section 81 of the Tax Administration Act 1994 provides a strict rule of taxpayer secrecy, where the secrecy of all matters relating to the various tax Acts administered by the Commissioner of Inland Revenue must be maintained. At the same time, the Tax Administration Act 1994 recognises that the duty to maintain secrecy cannot be absolute and so there is a list of targeted exceptions to the general secrecy rule.

The AISA framework

3.4 One of the exceptions to the general secrecy rule of the Tax Administration Act 1994 allows for information to be shared under an approved information sharing agreement (AISA). An AISA is a legal framework under the Privacy Act 1993 which authorises the sharing of information between or within agencies for the purpose of delivering efficient and effective public services. It provides certainty around the purpose of information sharing, the use of the information shared, and management of privacy risks. When justified, an AISA can authorise modification or exemption to the privacy principles set out in the Privacy Act 1993.

3.5 The development of an AISA includes consultation with the parties involved, including government agencies and persons or organisations representing the interests of individuals whose information will be shared. This process involves continuous oversight from, and consultation with, the Privacy Commissioner. An AISA ultimately requires an Order in Council, the associated Ministerial and Cabinet approvals, and regulatory impact analysis.

3.6 The AISA framework allows future amendments to be made when there is a need for including other agencies, new information and new purposes for sharing. However, any changes would still go through the same robust process undertaken for its development, to ensure the Privacy Act 1993 safeguards are maintained and consultation is undertaken within government, and with the public.

The Serious Crimes Information Sharing Agreement

3.7 In 2014, the Serious Crimes Information Sharing Agreement between Inland Revenue and the New Zealand Police was implemented to help reduce the level of serious crime and assist investigations into serious crime in New Zealand.

3.8 Under the information sharing agreement, the New Zealand Police can request a range of information from Inland Revenue when investigating a serious crime. There can be multiple information requests associated with the same case or prosecution. Inland Revenue can also proactively provide information to the New Zealand Police. This includes information about individuals and their tax returns, debt and audit history, and information about individuals who are linked to them. Non-individual information is also included in the current agreement and Inland Revenue provides this information when it is clearly relevant to the serious offence being investigated.

3.9 In the 12 months to 30 June 2017, Inland Revenue received over 200 requests for information from the Police.[3] At the time of reporting these requests had resulted in 34 prosecutions, with 96 cases still under investigation. The estimated cost of the information sharing agreement for Inland Revenue was $19,995 for the year.

Previous research and public consultation on sharing information for targeting serious crime

3.10 In 2014, Inland Revenue partnered with an external research firm to conduct interviews and an online survey on sharing information for targeting serious crime. The purpose of the research was to better understand how Inland Revenue’s involvement in information sharing to support the Government’s response to serious crime could affect perceptions of the integrity of the tax system.

3.11 Overall, the research found that Inland Revenue’s participation in information sharing actions to address serious crime was considered to be acceptable if it was “fit-for-purpose”. The concerns raised by the research participants included balancing the:

  • individual’s right to privacy with the social benefits to society;
  • nature of the serious crime with the type and breadth of information requested; and
  • intended and potential use of the information with the risk of error and its misuse.

3.12 The research results also indicated that cross-government information sharing to address serious offending is an all-of-government issue and is not specific to Inland Revenue. Tax secrecy does not appear to be a significant concern when considering Inland Revenue’s involvement in cross-government information sharing to address serious crime. However, the potential impact on citizens’ trust in Inland Revenue and the subsequent impact on the integrity of the tax system would need to be considered. Provided the Government communicates that Inland Revenue will share specific taxpayer information only under specific circumstances, both trust and integrity will be maintained despite selectively relaxing tax secrecy regulations to identify and stop serious crime.

3.13 Submissions on the 2013 discussion document Targeting serious crime [4] indicated more support than opposition to sharing tax information to prevent serious crime. In general, submissions in favour of the proposals noted that information should flow freely across government departments; that serious criminals should not be protected by privacy laws; and that a greater ability to share information across the government would result in more resources being freed up and improve government agencies’ ability to detect people committing serious crimes.

3.14 Table 1 sets out the key concerns raised in submissions from the previous public consultation, and the officials’ responses to these.

Table 1: Key concerns raised in submissions from previous public consultation
Topic Area of concern Officials' response
Integrity of the tax system Whether the proposals would have a more than a minor effect on the integrity of the tax system and consequently on revenue collection. Officials noted that although sharing information may negatively impact the integrity of the tax system, not sharing information to assist in combatting serious crime may also have a negative impact as it may be perceived as negligence.
Resources Whether the proposals would significantly impact Inland Revenue resources, and whether Inland Revenue staff are sufficiently experienced or resourced to make the required judgments to authorise the release of information. This has been addressed by having a small dedicated team with specialised training to handle such requests.
Security How secure the information would be, and whether information shared about a suspected serious crime would be used for the prosecution of a lesser crime (in place of the original suspected serious crime). Inland Revenue is generally recognised as having good information security, alongside the protections of the strict secrecy requirements imposed on staff and anyone who receives tax information.
However, officials noted a privacy breach is clearly one of the risks associated with any information sharing proposal and requires careful management.
Agencies must also enter into a memorandum of understanding before any information sharing can take place. This is a formal agreement that details how information will be handled and sets out a process to be followed, should a breach occur, despite the protections in place. If there is considered to be a risk of on-going breaches, information sharing will be immediately suspended.
On using information for the appropriate purpose (serious crime), if there are concerns that an agency is not meeting the terms and requirements of the information sharing agreement, the agreement could potentially be suspended or cancelled.
Undue inhibition of rights and privileges Whether the proposals unduly infringe taxpayers’ rights against unreasonable search and seizure, and privilege against self-incrimination. Officials noted that the proposed information sharing would not alter the way in which the Commissioner of Inland Revenue will be exercising her statutory powers, and therefore officials do not consider that there is any undue imposition on an individual’s rights.
Impact on Inland Revenue’s existing powers Whether the proposals might result in challenges to the exercise of Inland Revenue’s search and seizure powers in tax cases, due to the possibility of the information being used in other criminal proceedings. Officials noted that the Commissioner would not, in any circumstances, be using her information-gathering powers to look for information on behalf of other agencies. It seems unlikely that the Commissioner would be barred from exercising her statutory powers if a taxpayer was concerned about that information possibly being used in an unrelated prosecution.
Transparency and notification Whether the proposals provided sufficient transparency and notification of those affected. Although officials appreciated the concern raised, notification is not appropriate given the purposes of the proposal. Notifying someone that their information has been shared, for example with the Police, would serve to put the person on notice that they were subject to a criminal investigation and render the proposal largely ineffective. Similar exclusions from notification are included in the Privacy Act 1993.



[3] See page 171 of Inland Revenue’s 2017 Annual Report, available at

[4] Targeting serious crime: a government discussion document about the sharing of tax information to prevent serious crime, April 2013, available at