Sage Eugenie: Taxation (Land Information and Offshore Persons Information) Bill — Second ReadingText is incorporated into the Bound VolumeSage Eugenie: Taxation (Land Information and Offshore Persons Information) Bill — Second Reading[Sitting date: 08 September 2015. Volume:708;Page:6321. Text is incorporated into the Bound Volume.]EUGENIE SAGE (Green):Tēnā koe Mr Deputy Speaker. I am pleased to take a brief call on the Taxation (Land Information and Offshore Persons Information) Bill. We have heard at length from Mr Bayly and Mr Bishop about why the Government did not take the advice not only of the Inland Revenue Department but of tax specialists like Ernst and Young and is insisting on making this legislation more complicated creating potential loopholes and potentially increasing the compliance costs. Mr Bishop said that the Government did not want to increase the volume of information that people would have to provide and it did not want people to have to worry about whether they would be taxable and that was the reason for rejecting the Inland Revenue Department’s advice that this requirement to provide IRD numbers should apply to all transactions. It is a basic principle of tax law that it should be clear. But what we are getting here as Ernst and Young described it is “a confusing mix of tax immigration and overseas investment concepts which are likely to give rise to a number of technical and practical issues …”.The bill is a mishmash. Because the Government is rushing the legislation through—wanting to get it passed by 1 October because that is when it wants the new brightline disposal test for residential properties other than the taxpayer’s main home to apply—it is failing to take into account all of the concerns of submitters. It is a poorly drafted bill. There have certainly been some improvements at the Finance and Expenditure Committee but those improvements are not enough. The fact that there is this exemption for a main home as Ernst and Young said “may simply reinforce [the] ignorance and the lack of appreciation as to when there might be an income tax liability …”. The definition of “main home” as being somewhere that a person “has the greatest connection” with is just another example of the law being poorly drafted. That term “greatest connection” is not something that is used in tax law and it is not used in New Zealand law generally so there is no common or accepted understanding of what it means and how it should be interpreted and applied. Also when we are dealing with tax law something like that is far too subjective. Yes the Government is saying that there will be advice provided but this “greatest connection” test is likely to lead to disputes about whether someone has the greatest connection with the home that they spend the most time in or has the greatest connection perhaps with a holiday home because they have got much more of a heart connection with the place where they spend their holidays because these are much more memorable. When you have got subjective tests like that in tax law it is not good law. It is going to lead to disputes; good income for tax lawyers potentially but it is not clear.The Green Party is nevertheless supporting the bill because it is a very small step—and taking into account Fletcher Tabuteau’s comments—to getting tighter controls on overseas investment and the offshore purchase of New Zealand land and a bit more information on that. Of course the Green Party has been calling for a register of purchasers of New Zealand land by offshore investors for some time because it is ridiculous that we do not know that—that in this the 21st century we cannot have a register that is publicly available so that there is certainty around the percentage of New Zealand land that is being alienated to offshore interests. So although we support the objectives of the bill about obtaining more timely information from people who are buying and selling land and about improving compliance with the land sales provisions and tax legislation the unclear exemption in the bill the number of loopholes and the subjective nature of some of the drafting will not reduce red tape which this Government says the bill is about and it will not provide for better government because it is a mishmash of concepts and it is likely to increase the compliance costs because it is confusing.