Mallard Trevor: Taxation (GST and Remedial Matters) Bill — In Committee Speaker Recalled In Committee Procedure Third Reading 
Mallard Trevor: Taxation (GST and Remedial Matters) Bill — In Committee Speaker Recalled In Committee Procedure Third Reading 
[Volume:669;Page:16163] 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I rise to talk to Part 6 of the Taxation (GST and Remedial Matters) Bill which is clauses 101 102 and 103. The biggest part of it is clause 102 and it is likely that there will be a reasonable amount of focus on that clause. These are amendments to the Stamp and Cheque Duties Act 1971. Stamp and cheque duty was much more important in 1971 than it is currently because it was both a method of revenue collection and a policy tool. It was used as an intervention to head the economy in particular directions and I think it is fair to say that continued through until about 1984. Since 1971 there have been a number of changes. For example there has been a lot of work in the area of double tax agreements.  
The focus in clause 102 is on the approved issuer levy and the effect on what is liable for stamp and cheque duty in regard to it. The new section 86I which is to be substituted in the Stamp and Cheque Duties Act by clause 102 indicates in subsection (2) that despite the non-residential withholding tax rules a payment of interest under a registered security is treated as having been paid by an approved issuer only to the extent to which the approved issuer levy in relation to the security is paid by or on behalf of the approved issuer. I ask the Minister in the chair the Hon Georgina te Heuheu why that is the case. I would have thought there was an obligation to have it paid in full. I know that this Minister is not the primary Minister in charge of stamp duty and related matters but I wonder about the question of liability for the part that has not been paid. Where an issuer levy should have been paid but has not been paid I ask whether there is still an obligation for stamp and cheque duty to be paid in that case. I do not mind if there is a nod or a wink from the Minister in the chair to indicate what the particular approach is. Of course I would prefer it if she took a call on this matter.  
This is a serious question. If an issuer levy that should have been paid has not been paid I ask whether there is still a liability for taxation on it. If someone has income that has not yet been received under our accrual system I ask whether the tax is payable on it. We have moved away from the days when the Chair was involved in some of these matters and we do not work entirely on a receipts and payments basis now. We have an accrual system and we work on the basis of income and expenditure. But it appears that there is some reversion to a receipts and payments approach rather than having an accrual system and an income and expenditure basis in this particular case. I want to know whether that is an accurate characterisation of what is occurring here. Is this something that is new or is it something that has been there? I ask this because we cannot tell by looking at the amendment and by looking back at the legislation as to whether that is the case.  
I then go to clause 102 which inserts new section 86I. I might need to correct myself as I think I might have said “section 86(1)” earlier. But it is section 86I so I think I need to put my glasses on. Subsection (2)(b) of that section states: “the amount of the levy based on the leviable value of the registered security at the time of the payment of the interest is paid—(i) at the rate set out in section 86J; and”—