Sunday, June 23, 2024

PSA says tax Act axeing is ‘wrong move’

The Public Service Association (PSA) says scrapping taxation principles reporting is an attack on transparency and accountability, and undermines the role of the public service in informing public debate on a crucial issue for New Zealand.

PSA National Secretary, Kerry Davies says the Government’s decision to repeal the Taxation Principles Reporting Act 2023 is the wrong move.

“Transparency and accountability are fundamental to trust in Government, and this is particularly important in relation to how it gathers revenue through the taxation system,” she said.

“Work done by public servants in Inland Revenue was crucial in informing the public ahead of the general election about how unequally taxation is levied on New Zealanders. Without their mahi we would not have known that 311 wealthy families in New Zealand were paying around half the rate of tax as the average New Zealander.”

Ms Davies said good decision making around taxation was required and must be evidence-based.

“That is why the PSA, along with many other organisations, supported the introduction of internationally-recognised taxation principles reporting and we call upon the government to send the repeal legislation to a select committee so that its merits can be openly considered and weighed.”

“In the regulatory impact statement provided when Parliament debated the current legislation Inland Revenue supported the introduction of statutory reporting against tax principles. It‘s not credible that this free and frank advice will have changed within the space of months, but because the government has done away with repeal bill impact statements it is effectively silencing the voices of its own taxation experts.

“We call on the government to at the very least release the significant work that will have already gone into producing the Commissioner’s first report which was due to be published within days. The public deserves to see the advice officials have spent months preparing rather than have this discarded and disregarded,” Ms Davies said.

The Government yesterday progressed under urgency a Bill to repeal the “unnecessary” tax Act.

“The Taxation Principles Reporting Act 2023 was passed by the previous Government this year, despite widespread opposition. It would have required Inland Revenue to report annually on tax measures against a set of tax principles,” said Revenue Minister, Simon Watts.

“The bureaucracy it would have entailed is completely unnecessary. This Government is committed to directing taxpayer resources to their best use and repealing this Act is consistent with that.

“Requiring Inland Revenue to produce additional annual reports would take extra resources at a time when our focus should be on higher priority measures to address the cost of living and get the government’s books back in order.”

Minister Watts said it was necessary to pass the Tax Principles Reporting Act Repeal Bill under urgency because the Act requires Inland Revenue to report under the Act by 31 December unless repealed prior.

“Repeal of the Act ensures IRD’s resources are focused on collecting tax and contributing to the delivery of the Government’s income tax reduction plans,” he said.

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