Chapter 2 – Frameworks
2.1 From previous studies of the tax system we have identified four pillars that set out the core framework for the administration of the tax and social policy system to function well:
- Fairness: This is crucial for maintaining social licence and promoting voluntary compliance. It means people in similar situations being treated similarly and those in different situations being treated differently.
- Integrity: The systems collect the revenue that Parliament has mandated, and people receive what they are entitled to.
- Efficiency: This is about minimising the total cost of administering the tax and payments system. This includes the compliance costs, including emotional costs, to taxpayers and recipients, and administration costs to Inland Revenue.
- Effectiveness: The system contributes to other elements of the New Zealand economy and society. An example could be how data supplied to Inland Revenue can be used for non-tax purposes.
2.2 There are also other perspectives which can provide weight or emphasis to the pillars. The first is the impact of technology.
2.3 In a more digital world, how Inland Revenue and its partners think about technology will also shape how the administration of the tax and social policy system evolves. A core part of Inland Revenue’s business transformation was developing a digital platform for the tax system. In terms of how this could evolve, we have been influenced by the OECD’s publication Tax Administration 3.0: The Digital Transformation of Tax Administration.
2.4 Technology enables key concepts, such as:
- A greater integration of tax and social policy administration into the natural systems that individuals and businesses are using for regular tasks.
- Efficiency through accessing data in real time and removing redundancy.
2.5 Consideration of technology prompts various questions:
- How do we ensure taxpayers have control over the systems and processes they will use for managing their tax and social policy entitlements so that they maintain trust in Inland Revenue?
- How can processes be automated since this can be the key to efficiency gains?
- How do we think about the boundary between Inland Revenue and external parties so that processes are handled in the most efficient way from a system perspective?
2.6 The above-mentioned can apply equally well to tax systems around the world. The final framework we have considered, and which has particular weight for the New Zealand system, is He Ara Waiora.
2.7 Under te Tiriti o Waitangi-the Treaty of Waitangi, the government is committed to work with Māori to actively protect Māori interests and to consult with Māori on matters significant to them.
2.8 He Ara Waiora is a framework centred on an ao Māori view of wellbeing. It was initially developed for the Tax Working Group by Māori thought leaders, Ngā Pūkenga, who continue to work with the Treasury to develop and apply He Ara Waiora to policy work.
2.9 The principles of He Ara Waiora are derived from mātauranga Māori and are relevant to the wellbeing of all New Zealanders. These principles emphasise: co-ordination and alignment, partnership, collective and strengths-based actions, protecting and building mana, and stewardship, as illustrated by these examples:
- Kotahitanga: Kotahitanga encompasses the unity of people, actions, purpose, and vision. Through kotahitanga, He Ara Waiora encourages people to work together for the benefit of all, driven by a shared purpose and inspired by shared aspirations.
- Whanaungatanga: Focusses on relationships and kinship. Relationships with iwi, hapū, and whānau Māori interests are essential to addressing challenges, and improving economic and social outcomes for Māori and New Zealand.
- Manaakitanga: This value is associated with care, relationships, and reciprocity. Manaakitanga requires maintaining a focus on improved wellbeing and enhanced mana for all New Zealanders.
- Tiakitanga: Tiakitanga is about guardianship and has connotations of responsibility and obligation. Tiakitanga helps promote long term sustainability.
2.10 Consideration of He Ara Waiora encourages us to consider:
- Are there ways of improving outcomes for all New Zealanders, including Māori, through greater involvement of external parties in providing services to taxpayers or social payment recipients?
- How do concepts of trust and reciprocity play out in the tax and payments system?