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New Zealand Income Tax Bill Approved

by Mary Swire,, Hong Kong

30 October 2007

Finance Minister Michael Cullen and Revenue Minister Peter Dunne have hailed the passage of legislation which rewrites New Zealand’s income tax law.

Commenting on the approval of the nearly 3000-page Income Tax Bill by parliament on October 25, the ministers stated that the bill is the culmination of 15 years’ work to rewrite the Income Tax Act, and was "a massive achievement for the many people who have been involved in the project over the years."

“The purpose of rewriting the Income Tax Act was to produce tax law that is clear, written in plain language and is structurally consistent. That makes it easier for users to find what they need, to understand it, and to apply it, which in turn helps them to comply with the law," Cullen and Dunne commented.

The ministers continued:

“Where possible, the language of the law has been made more concise, legalese has been avoided, and archaic terms have been removed or replaced. For example, a 14-line sentence has been broken up into three easily understandable subsections, and terms like ‘hereinbefore’ and ‘hereinafter’ have been rightly culled or replaced with modern language.

“In the process of rewriting the Act, great care has been taken to ensure that the original intention of the legislation has been retained. The few intended changes that have been made have all been presented for public consultation over the years."

"The rewrite of the Income Tax Act has been carried out in the Policy Advice Division of Inland Revenue by a small team of public and private sector drafters and analysts. The work has been overseen by an advisory panel that includes members of the New Zealand Institute of Chartered Accountants and the New Zealand Law Society."

They concluded by observing that:

“In a speech to the Law Commission last year, the Rt Hon Sir Geoffrey Palmer said of the rewrite: ‘The most innovative accomplishment in New Zealand tax law has been the rewriting of the tax legislation in user-friendly language and easy-to-use format. That sounds a simple enough process, but it was so difficult that Australia gave up on it…The whole process has been accomplished in New Zealand without much fuss and with modest expense. It is a considerable achievement’."

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