Nash Stuart: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — In CommitteeText is incorporated into the Bound VolumeNash Stuart: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — In Committee[Sitting date: 12 April 2016. Volume:713;Page:10414. Text is incorporated into the Bound Volume.]STUART NASH (Labour—Napier): I stand to talk to Part 4. It is largely technical in nature. It is the amendments to the Tax Administration Act 1994. Whenever we have a tax bill through the Finance and Expenditure Committee and it passes through the House there are always amendments to the Tax Administration Act because as the title suggests it is the Act that governs the administration of the tax system. It just makes sense that when the tax system changes then so does the administration of that system.There was not that much that was contentious under this part. I suppose that one clause there was a number of submissions on was clause 71 “Section 24B amended (Offshore persons’ bank accounts and tax file numbers)”. There were a number of submitters including Chartered Accountants Australia and New Zealand New Zealand Racing Board PwC—Dr David Clark: PwC?STUART NASH: Well good point. I wonder why it submitted. We could take a deeper look at that one.In a similar vein in clause 71 is the requirement for an offshore person to have a New Zealand bank account number in order to apply for an IRD number. Again there were submissions from Chartered Accountants Australia and New Zealand Corporate Taxpayers Group KPMG and OliverShaw Ltd. I must admit—and I do not mean to curry favour with anyone—whenever I see a submission from OliverShaw it tends to be the first one that I read because those two gentlemen who are the partners in OliverShaw know a little bit about the tax system. I think Robin Oliver is—is there such a thing as a master taxation expert? If there is then Robin is one of those people. He is that rare individual who takes absolute joy in poring through tax bills in minute detail and finding the errors and places where things can be changed and all power to him. Without someone like Robin I think a lot of things that are not that pragmatic would disappear but he is very much a pragmatist as well and he understands the role of tax legislation.What this clause is about is that from 1 October 2015 which is when the brightline test came in a person who is an offshore person or a resident withholding tax person must have a functioning New Zealand bank account in order to apply for an IRD number. The requirement to have a New Zealand bank account is part of our anti - money-laundering identification verification requirements that apply only to offshore persons and it was introduced in Budget 2015 in the suite of changes to tighten up our anti - money-laundering rules. Unfortunately in that Budget it did not have anything about offshore trusts or anything like that. I suspect we know the reason why but that is beside the point.Hon Michael Woodhouse: Why is that Stuart?STUART NASH: Well because it was unknown Minister and the interesting thing is—now that the Minister has asked that question I feel bound to respond because the Minister actually said in the media that New Zealand does not have a problem with multinational companies not paying tax. The interesting thing about that is the Obama administration the Cameron Government and nearly every single OECD country has identified the fact that there actually is a problem; it is the solution they are grappling with. We know the problem but apparently our Minister of Revenue believes that we are the only country in the OECD without a problem.Dr David Clark: It doesn’t mean the Government doesn’t have a problem; it means the National Party doesn’t have a problem.STUART NASH: Oh maybe that is what it is Mr Clark. But we do have a problem and unfortunately what has been shown in recent days is that our tax system has come under increasing pressure—The CHAIRPERSON (Lindsay Tisch): Order! Come back to the bill.STUART NASH: Sorry Mr Chair I was just responding to the Minister—The CHAIRPERSON (Lindsay Tisch): No no.STUART NASH: Oh OK.The CHAIRPERSON (Lindsay Tisch): Come back to the bill.STUART NASH: Yes sure. What I was saying is that this comes into—any more comments Minister you would like me to answer on? An offshore person—this is basically for anti - money-laundering rules which are incredibly important for the integrity of our tax system. We talked about the fact that an individual will be an offshore person for the purposes of a bank account requirement if they are not a New Zealand citizen and they do not have a residence class visa. We talked quite a bit about this because there are certain residents like Recognised Seasonal Employer scheme workers who come into the country and are here for about 3 months. They earn very little in the scheme of things to be honest and we asked whether they needed to have a bank account. I think in the end we did not require that they had to have a bank account.Hon Michael Woodhouse: No they do.STUART NASH: They do?Hon Michael Woodhouse: Of course they do.STUART NASH: Well hmm. We talked long and hard about this and there was a very good discussion between the expert advisers. But anyway a New Zealand citizen will be considered an offshore person—we have discussed this—if they are not present in New Zealand and have not visited in the past 3 years. But as has been out outlined in another part of the bill all a New Zealand resident has to do is enter the country on holiday show their passport and out they go again and that is scrubbed. It is very easy to get around this if you are a New Zealand passport holder.