Nash StuartSTUART NASH (Labour—Napier): Hobson's choice I think they call it. I would like to talk about clause 321 which amends section 45(4) of the Goods and Services Tax Act. This is interesting and it is something I have been talking about for a long time actually but it is only a very small part of what I have been talking about for a long time. What section 45(4) does is it allows the Commissioner of Inland Revenue to refund overpaid tax which is all very well but after the normal 4-year period. So how tax works at this point in time is if a taxpayer is owed money by the IRD then they have a 4-year window in which they are allowed to apply for that tax refund. After that 4-year window it drops off so they can no longer claim it until this bill. What this bill actually allows companies to do or allows the commissioner to do but also allows companies to do is actually make a claim where an application has been received in the second 4-year period—so between 4 and 8 years—and the overpayment is due to a clear mistake or a simple oversight and give the money back.Hon Ruth Dyson: By either party.STUART NASH: Well by either party but I am assuming that the IRD probably—and I should give the IRD credit. I am assuming the IRD probably is not going to go to a company after 4 years and say Sorry we owe you quite a lot of money in GST." keeping in mind that this is only for GST. I would actually like to see this extended beyond GST and to include income tax and in fact all types of taxes. I suspect and I am hoping that when the Business Transformation IT project comes into play this sort of legislation we are talking about in clause 321 will actually be null and void because the system as it is being built will be able to calculate this.But the interesting thing is it says that the proposed method also contains a traditional provision that ensures that the commissioner may repay an amount in respect of existing claims regardless of when this bill is introduced. The thing that concerns me a little bit about this is the word "may". What that word "may" does versus say for example "must" is it means there is discretion on behalf of the commissioner and in this case she might not actually decide to pay that. I cannot for the life of me comprehend of a situation where as the bill says if there is a clear mistake or a simple oversight and that is acknowledged by both parties the commissioner would not pay this but I am just not too sure why it is that there is discretion on behalf of the commissioner to determine whether this is paid or not.There are other words in this section that cause slight concern. For example under the provision the commissioner could provide a refund when the application is received but it is not "must" provide a refund if an application is received. So what the IRD has done with this I think is leave a little bit of wiggle room which I think perhaps skews this clause more towards the favour of the IRD as opposed to the taxpayer.I am not suggesting that the IRD is going to abuse this in any way shape or form because it has been my experience in dealing with officials all through this legislation and all the other bills that have come before the Finance and Expenditure Committee that the IRD actually acts in a very fair way. That old line "Trust me I'm from the IRD." is actually unfair to the IRD. But where it leaves discretion on behalf of the commissioner where there has been an agreed mistake or error on behalf of either party I think that the legislation should probably compel the commissioner to pay back money. Keeping in mind we are with this clause overriding a long-established convention that there is a 4-year period within which taxpayers can claim back refunds I just think that it should be a little bit tighter in that.In this Part 3 there is actually quite a bit on GST and the changes that the bill makes because there are some errors. You know when you get a tax system like GST there are always some areas that need updating every now and again. There is actually a section 46 though—we are talking about the Tax Administration Act here—where the commissioner does have the right to withhold payments. Again it does not really make it particularly clear what those rights are and it should perhaps be just a little bit clearer. I know that there could be any number of circumstances that the commissioner may determine that this just is not right or it does not smell particularly good but it would be good if it was just a little clearer in that area.There are a couple of other things that I would like to talk about in Part 3—for example clause 319. There is a new section inserted and it is about the consequence of change in a contract for second-hand goods. This is actually quite relevant because we are finding more and more Kiwis are actually sourcing their goods from TradeMe—so second-hand goods—and what are the consequences of the change in the contract for second-hand goods? For example in new section 25AB—again we are talking about the Tax Administration Act here keeping in mind that Part 3 of this bill as to be honest in most bills is sort of an amendment to other enactments. In these sorts of bills there are always amendments to the Tax Administration Act 1994. The Tax Administration Act actually sets out the rules under which the IRD runs the whole tax system. But in new section 25AB this section is going to apply "to a supply of secondhand goods to a registered person if—(a) the supply is affected by an event referred to in section 25(1)(a) to (c); [or if] the registered person returns input tax on the supply as a deduction from the amount of output tax for a taxable period [or] the supplier does not provide a tax invoice or debit note …" to the supplier.The thing about this is it can be quite complicated and I suppose by its very nature tax legislation has to be. But I suppose the other thing that concerns me a little bit is when it gets too complicated then what will happen is that people who should be aware of this sort of legislation actually just have no idea about it. So they do not use it and in fact they fall by the wayside. I am not suggesting that this is relevant throughout this legislation at all but we just need to be slightly aware that this can happen.There are also amendments to Stamp Duty and Tax—sorry—amendments to Stamp and Cheque Duties Act 1971. So a bit of a mouthful.Hon Ruth Dyson: Can you say that again? STUART NASH: Yes sorry. Let me start that again—thank you. We are talking about clause 328. This is amendments to the Stamp and Cheque Duties Act 1971. It is an interesting one because I did not actually know we had stamp duty in this country. As for cheque duties in the days when we all wrote cheques we all knew there was a little thing down at the bottom that said: "Cheque duty has been paid on this cheque book."But there is still an Act. What this talks about is the definition of a registered security. So we are just amending this Act. This talks about a registered security meaning at any time any transaction involving money lent to an approved issuer that is registered by the commissioner under section 86H or is one class of transactions so registered or that the transaction involves money lent to an approved issuer that is treated by the commissioner as a registered security. Who knew that the Stamp and Cheque Duties Act 1971 was still around and had quite a relevance to the application to the register of securities? There is quite a lot of new legislation in this—talking about interest payments and a whole lot of different things.The other thing that some might be interested in as well is amendments to the Student Loan Scheme Act 2011. What they are doing is they are talking—this Act is dealing with calculating the amount of fringe benefit tax on a facility that a person may use. Again we are getting pretty technical here but what I do think is important is that anyone who has a student loan—and there are a number of people out there; we know that—should be aware of this. What I am hoping and the Minister might be able to help us with this is that the IRD will do a little more than it normally does because it normally puts out a tax information bulletin and they are very helpful. What it does is it puts legislation in plain English. What I think would be good is if the amendments to the student loan scheme were sent out in a way so that everyone who has a student loan is aware of the changes—whether or not they affect them. The last thing we want and the last thing that people with a student loan want is to trigger some sort of liability that they just were not aware of. We see a number of these changes in tax legislation and it is just important to ensure that Kiwis understand their rights.There are of course amendments to the Income Tax Act. This is tax legislation and there are always small amendments to the Income Tax Act. Apart from of course Part 1 which was a massive amendment to the Income Tax Act because it just sets the rules. But we have debated that until we are a blue in the face. But there are a number of amendments around—if a company provides moneys to a person if the person is related there is an obligation to pay money and all this sort of stuff. Again it is quite complicated but it is important that it is acknowledged."