Statements issued by the Commissioner of Inland Revenue - with recent legislative changes what is their legal status?
MetadataShow full metadata
This dissertation discusses what if any impact that changes made to New Zealand’s tax administration system have had on the legal status of statements made by the Commissioner of Inland Revenue. One of the Commissioner’s strategic goals is to improve voluntary compliance with the Revenue Acts. One mechanism used by the Commissioner is the issuing of binding rulings and non-binding statements. Binding rulings bind the Commissioner to a particular tax position for as long as the ruling is in force; non-binding statements provide guidance to taxpayers on the Commissioners view of the law. Over the past two decades New Zealand’s tax system has undergone major reform. This paper reviews aspects of that reform then asks do these changes mean that taxpayers are now able to argue in a court of law that they had a legitimate expectation that the Commissioner would act in a certain manner in relation to their tax affairs. Judgements from prior to and after the enactment of the care and management provisions are examined along with relevant overseas authorities. The conclusion is that while the courts agree that a taxpayer may argue they had a legitimate expectation the Commissioner would act in a certain way they have yet to see the circumstances that allow the argument to succeed. A successful argument would involve a serious abuse of power. While this may provide a level of comfort for the Commissioner when dealing with taxpayers it also raises questions about the accountability of Inland Revenue officers. To ensure he achieves his objective of improving voluntary compliance the Commissioner needs to ensure that his officers act in a consistent manner.