Budget 2023: Tax Principles Act off to an unprincipled start
Auckland, 18 May 2023 – As part of today’s Budget 2023 announcements, the Tax Principles Act is expected to be tabled and swiftly proceed through Parliamentary processes, with the potential to bypass a select committee.
Inland Revenue has long been working on the development of a Tax Principles Act, referenced by the Minister of Revenue during his 2022 speech on tax fairness. The tax community was met with surprise today with the Government seemingly making the decision to bypass seeking public feedback on a proposed tax law and has instead gone straight to legislation, in the form of the Tax Principles Bill.
The Generic Tax Policy Process (GTPP) has been in place since 1994 and is designed to ensure that tax laws are well thought through, and stakeholders have the opportunity to contribute to the design of laws.
“The decision to bypass consultation on the Tax Principles Bill goes counter to the GTPP and is yet another example from this Government, having also introduced trust disclosure rules and extensive information gathering powers after the 2020 Election without consultation. The irony of the lack of GTPP on tax principles will not be lost on the tax community,” says Deloitte Tax Partner, Robyn Walker.
In terms of the tax principles which should be adhered to, it can be speculated based on the Minister’s previously mentioned principles, that they may cover horizontal equity, vertical equity, administrative efficiency and the minimisation of tax induced distortions to investment and the economy.
Aside from having principles to comply with, the Tax Principles Bill is expected to include information collection and monitoring requirements. It can be expected that many tax proposals will not satisfy all of the principles.
“Given the possibility that this legislation will be pushed through under urgency, it sets the scene for an election period where all political party policies will be debated against these principles,” continues Walker.
With little consultation on what the tax principles might be, it gives a glimpse into what might be coming from the Labour Party Tax Policy.
For Deloitte’s full Budget 2023 commentary visit: Striking a balance | New Zealand Government Budget 2023
For spokesperson comments please contact Deloitte Tax Partner Robyn Walker:
M: +64 211315413
E: robwalker@deloitte.co.nz
ABOUT DELOITTE
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organisation”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
Deloitte Asia Pacific Limited is a company limited by guarantee and a member firm of DTTL. Members of Deloitte Asia Pacific Limited and their related entities, each of which is a separate and independent legal entity, provide services from more than 100 cities across the region, including Auckland, Bangkok, Beijing, Bengaluru, Hanoi, Hong Kong, Jakarta, Kuala Lumpur, Manila, Melbourne, Mumbai, New Delhi, Osaka, Seoul, Shanghai, Singapore, Sydney, Taipei and Tokyo.
Deloitte provides industry-leading audit and assurance, tax and legal, consulting, financial advisory, and risk advisory services to nearly 90% of the Fortune Global 500® and thousands of private companies. Our professionals deliver measurable and lasting results that help reinforce public trust in capital markets, enable clients to transform and thrive, and lead the way toward a stronger economy, a more equitable society and a sustainable world. Building on its 175-plus year history, Deloitte spans more than 150 countries and territories. Learn how Deloitte’s approximately 415,000 people worldwide make an impact that matters at www.deloitte.com.
Deloitte New Zealand brings together more than 1800 specialist professionals providing audit, tax, technology and systems, strategy and performance improvement, risk management, corporate finance, business recovery, forensic and accounting services. Our people are based in Auckland, Hamilton, Rotorua, Wellington, Christchurch, Queenstown and Dunedin, serving clients that range from New Zealand’s largest companies and public sector organisations to smaller businesses with ambition to grow. For more information about Deloitte in New Zealand, look to our website www.deloitte.co.nz.
This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms or their related entities (collectively, the “Deloitte organisation”) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser.
No representations, warranties or undertakings (express or implied) are given as to the accuracy or completeness of the information in this communication, and none of DTTL, its member firms, related entities, employees or agents shall be liable or responsible for any loss or damage whatsoever arising directly or indirectly in connection with any person relying on this communication. DTTL and each of its member firms, and their related entities, are legally separate and independent entities.
© 2024. Deloitte Limited (as trustee for the Deloitte Trading Trust).
Media Contact(s):
Elizabeth Woods
Senior Communications Manager
Deloitte New Zealand
022 014 5489
ewoods@deloitte.co.nz
