The Commissioner’s powers to access information: a licence to fish

Cohen, Sharon
Smith, Nigel
Item type
Degree name
Master of Business
Journal Title
Journal ISSN
Volume Title
Auckland University of Technology

This dissertation critically analyses selected provisions within ss 16 and 17 of New Zealand’s Tax Administration Act 1994. This Act is administered by the Inland Revenue. These are the access and information gathering provisions empowered on the Commissioner of Inland Revenue. The landmark Privy Council decision New Zealand Stock Exchange shaped the Commissioner’s ability to requisition information and undertake “fishing expeditions”. This dissertation discusses the deficiencies with the legislation and how jurisprudence has dealt with the uncertainties challenged in the tax courts. Evidentially, it is very difficult for taxpayers to challenge s 17 notices. The courts have established that the Commissioner needs a “licence to fish” in order to perform his statutory duties effectively in a tax system that relies on voluntary compliance. One of the main issues presented by this ‘fishing licence’ is that the Commissioner has power to request information on unidentified persons from third party sources. The Inland Revenue have publicised their risk focus areas for the 2010-11 year. Two risk areas are e-commerce and undeclared foreign sourced income. Globalisation, the Internet and the ease of mobility of capital mean that taxpayers can easily move their money and invest their money offshore. The problem with this is that ss 16 and 17 are not effective in foreign jurisdictions and the Commissioner has to rely on tax treaties and tax information exchange agreements. The Commissioner is responsible for collecting the highest net revenue that is practicable within the law. There is a perception that the Commissioner is unable to do this without a ‘fishing licence’. This dissertation proposes for modifications to the legislation and for the introduction practices that are realistic and feasible for achieving a balanced outcome for both the Revenue and the taxpayers. The ideal environment is one in which the Commissioner relies less on accessing and requesting for information from taxpayers, but for automatically receiving this information from third party sources.

New Zealand , Fishing expedition , Access information and premises , Tax information exchange agreement , Case law , Tax legislation
Publisher's version
Rights statement