NZ Government Suggests Expanding Secrecy Rights For Tax Advice

by Mary Swire, Tax-News.com, Hong Kong

06 June 2002

In a discussion document released last week, the New Zealand government has suggested that secrecy privileges surrounding tax advice should be extended to recommendations given by members of all relevant professional bodies to their clients on tax matters.

Currently, tax advice given by lawyers to their clients is privileged, and cannot be accessed by the Inland Revenue department. In the discussion paper, entitled 'Tax and Privilege: a proposed new structure', Finance Minister Michael Cullen suggested that similar privileges should be extended to chartered accountants, but that the new non-disclosure principles should be limited to opinion on tax law, rather than to facts and figures.

'The current privilege rule prevents some factual information communicated between lawyers and their clients from being released to Inland Revenue. This creates widely recognised difficulties in the administration of the tax system,' Dr Cullen explained last week, adding that: 'The change will help to promote a greater sense of fairness amongst taxpayers if they see that others cannot use privilege to conceal the details of their income.'

Submissions on the consultation document must be received by July 31, according to the Revenue Department. However, the government's suggestions are in direct opposition to recommendations made in a recent Law Commission report.

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