Industry Partnerships and Targeted Amnesties at Ingrained Evasion

What is it about?

The New Zealand Government proposed in August 2004 a ‘radically’ new approach to address evasion in industries which is perceived to be ingrained, namely targeted amnesties. With a general election and other ‘more pressing’ issues, the proposal has not been significantly advanced. This paper provides further guidance for implementing a modified targeted amnesty concept, including a proposal from the author to consider incorporating targeted amnesties within the existing Industry Partnerships program that the IRD has been developing since late 2001. Although the Government’s proposal addresses concerns with evasion that is ingrained in some industry groups it makes no direct links between the targeted amnesties proposal with the IRD’s Industry Partnership program. Clearly, to raise expectations that amnesties would only be targeted to industry partners would run counter to one of the core concepts for tax administration in New Zealand – the protection of the integrity of the tax system including taxpayer perceptions of that integrity.

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Why is it important?

This article was the first to explore in depth the potential for the NZ Government to combine targeted tax amnesties with its Industry partnership programme. The idea was not formally developed although legislative power was provided for the Commissioner of Inland revenue to undertake targeted tax amnesties.