Wong Pansy: Taxation (Annual Rates Maori Organisations Taxpayer Compliance and Miscellaneous Provisions) Bill — In Committee 
Wong Pansy: Taxation (Annual Rates Maori Organisations Taxpayer Compliance and Miscellaneous Provisions) Bill — In Committee 
[Volume:607;Page:4238] 
PANSY WONG (NZ National) 
: 
 I really think the Minister should take a call because my colleagues starting with the Hon Lockwood Smith have raised four very substantial questions during the debate on this part. We have not heard one intelligent reply from the Labour side or from the Minister. National will certainly support the amendment to the draconian measures imposed in clause 103. 
I am going to raise another question and I really think it would be helpful if the Minister could pay attention start to read Part 3 and start to consult the officials. I have been reading Part 3 in which there are quite a few definitions. Part 3 involves the issue of penalties. Clause 72 “Interpretation” now has a subclause (2B). We now have the term “acceptable tax position”. The term “acceptable tax position” apparently means a tax position that is not an unacceptable tax position. This is very interesting. The public will be interested to know that an “acceptable tax position” means a tax position that is not an unacceptable tax position! 
So at that point I thought I had better do some research. I went back to section 141B “Unacceptable interpretation’’ of the Act. Apparently in that section headed “Unacceptable interpretation” an unacceptable tax position occurs when it: “(a) Is an interpretation or an interpretation of an application of a tax law; and (b) Viewed objectively that interpretation or application fails to meet the standard of being about as likely as not to be correct.” 
I think that the Minister should really take a call. The wording of that section is very unclear and many taxpayers may start to get really worried. First of all I would like the Minister to explain whose objective will be taken into account when they interpret whether that application fails to meet the standard of being about as likely as not to be correct. What is the test to determine whether the interpretation is “as likely as not to be correct.”? Is it at the sole discretion of the commissioner? Is there a process of application for review or is it done through some very long-established court cases? 
I say to the Minister that it is important for taxpayers to understand when a penalty is imposed on them when they become caught in a position that is actually not an acceptable tax position—no wonder people need lawyers to help when they are filing simple tax returns! I raise that issue because that particular interpretation alone is enough to scare taxpayers because how can they be sure that they are in an acceptable tax position? 
I also want to once again comment on a very important point—it was raised by both the Hon Lockwood Smith and Rodney Hide of ACT—and that is this: why is it once again not a level playing field? The Inland Revenue Department is a very significant Government department. It is well resourced. Why should it not be held to the same standards in terms of getting its assessments correct and in terms of the detail it needs to go into before the commissioner can actually say how likely it is for one to assume that the taxpayer is part of a scheme that is liable to be caught under the Act? It certainly is not fair for the commissioner to arbitrarily say “50 percent” or whatever the outstanding liability should have been.