Proposed tax legislation will create uncertainty for taxpayers, give unconstrained powers to the IRD and should be withdrawn, National’s Revenue spokesperson Andrew Bayly says.

“Revenue Minister David Parker’s Tax Principles Reporting Bill appears to be the first step towards a capital gains tax. It investigates unrealised capital gains, which are not currently taxable income but may become so when Labour pursues its agenda for new taxes.

“The legislation would give unconstrained power to the Inland Revenue, allowing the commissioner invasive rights to seek information from any taxpayer.

“Mr Parker’s Bill has drawn heavy criticism from stakeholders, such as the Legislation Design and Advisory Committee with a Parliamentary committee labelling it ‘unnecessary’ and warning that risks unintended and unforeseen consequences.

“The Revenue Minister was warned by Treasury that ‘the statutory reporting framework adopted in the Bill could present a risk to the integrity, independence, and endurance of the reporting framework’.

“The New Zealand Law Society says the Bill’s objectives could be achieved without legislation. Other submitters to the select committee raised concerns about the truncated process, which flies in the face of the usual treatment for tax policy which includes extensive public consultation and engagement.

“Rushing it in this way risks passing low quality legislation.

“Meanwhile, Mr Parker has not clarified the use of the terms such as ‘economic income’ in the legislation which, under IRD’s current terms, is not taxable income.

“After practicing the politics of envy for two years, Mr Parker has brought in a Bill under urgency that will worsen tax outcomes and create uncertainty for all taxpayers.

“National urges David Parker to take his pet envy project back to the drawing board. If the Bill is passed, National will repeal it.”