Taxation (Annual Rates, Venture Capital and Miscellaneous Provisions) Bill

This part is to do with the various adjustments—

💬 Hon Dr Michael Cullen: It’s very small and very non-controversial. [Interruption]

Ah! I am sure members of the public are waiting patiently, holding their breath, and I am sure the Hon Richard Prebble will make his usual forthright contribution in a very appropriate manner in terms of GST. I am not sure whether the trust has anything to do with GST, but I do point out that in Part 4—[Interruption] There may be invoices, and, interestingly, I understand we are not sure whether GST was properly treated on five or six invoices that were issued by the Waipareira Trust.

Part 4 relates to GST and who is supposed to account for it, and to whether there is an entitlement to a refund of any excess tax paid. New section 45 inserted by clause 134 deals with the refunding of excess tax. I find that quite interesting, because we were talking earlier about whether the Inland Revenue Department can present a friendly face to the public in terms of its handling of taxation issues. Certain provisions apply when a taxpayer is entitled to a refund of excess tax. First of all, the commissioner has to be satisfied that the amount represents an excess over the amount properly assessed for a taxable period, and that it falls within the 4-year period. But there is a catch. Under new section 45(4) the commissioner may refund an overpayment of tax after the end of the 4-year time limit if the commissioner is satisfied that the overpayment of tax is “the result of a clear mistake or simple oversight” by the person concerned.

Once again, in contemplating that particular section I wonder about the process the commissioner will adopt for determining whether the result is a clear mistake and how that is different from a deliberate mistake. How can the commissioner tell the difference between the two situations, and what process will the Inland Revenue Department employ to identify whether the overpayment of tax is a clear mistake or simple oversight on the part of a particular person? Also, during the determination period can the individual concerned really present his or her case clearly to the Inland Revenue Department? I certainly find the use of the term “a clear mistake or simple oversight” quite interesting, because to make that assessment actually tends to be quite subjective. What does a person have to do to demonstrate that an overpayment is a clerical mistake? How can someone’s intention be assessed if, for example, one gets a bit mischievous and thinks of the latest high-profile case being debated in the Chamber, involving the five famous invoices? When an overpayment of tax is involved, I wonder how the commissioner will actually assess whether there is a clear mistake or just a simple oversight—the invoice might be addressed to the wrong person or the address on the invoice itself might not be a true address.

Progress reported.

The House adjourned at 9.56 p.m.