Tax Justice Aotearoa is calling on the Minister of Revenue to retain the ability for Inland Revenue to collect vital information that supports effective tax policy making.

“We are concerned that the Minister initiated a review of this important provision within the Tax Administration Act just over a year after IR produced its report on High Net Worth Individuals,” said Glenn Barclay, Chairperson of Tax Justice Aotearoa.

“That piece of work provided us with the first in depth information on the scale of the inequities of our tax system and the review has the air of an exercise to close down or restrict similar research in the future. We are calling on the Minister to stick with this provision, which is essential to good tax policy making.”

S.17GB of the Tax Administration Act is the provision that enabled Inland Revenue to carry out that ground breaking Report on High Net Worth Individuals in 2023.

The report revealed that the wealthiest 311 families in the country had an effective tax rate of around 9%, while the average taxpayer had an effective tax rate of over 20%. 

“The lack of balance in our tax system is now well understood, but without the information gathered under S.17GB we would not have had the research on High Net Worth Individuals and would be guessing about the extent of the problem,” said Glenn Barclay.

S.17GB goes beyond the general information collecting power in the Act, which is not sucient to provide access to information that could potentially lead to policy change – it is mainly about enforcement.  

“The need for this provision is also a symptom of our badly out of balance tax system. If we were already taxing capital in any meaningful way, then it is reasonable to assume that IR would have much better information about what high net worth individuals are worth.

"In the absence of those taxes and that information, this provision becomes even more essential.” 

Glenn Barclay also drew attention to the relevance of s.17GB to other recently announced policies. 

“Government policies such as the possibility of reducing corporate taxes and encouraging wealthy individuals to come to New Zealand, mean that understanding their contribution to revenue is going to become more important, not less,” he said. 

“There is no good reason to reduce or eliminate this power to gather information other than to protect vested interests and we ask the Minister to put the public interest first.”

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