Nash Stuart: Taxation (Transformation: First Phase Simplification and Other Measures) Bill — In CommitteeText is incorporated into the Bound VolumeNash Stuart: Taxation (Transformation: First Phase Simplification and Other Measures) Bill — In Committee[Sitting date: 24 May 2016. Volume:714;Page:11150. Text is incorporated into the Bound Volume.]STUART NASH (Labour—Napier): I would also like to elaborate on a couple of things that Mr Robertson has spoken about. As mentioned electronic signatures—we have talked at length in Part 1 of this bill on how there is a move from requiring a written notice to the acceptability of an email or other electronic form of transaction. The reason for this is that it does bring it into the 21st century and that is important. But there is a very important rider on that and this is where electronic signatures come into play because if an electronic signature was not acceptable what it would in fact do is it would negate everything else in the bill in terms of an acceptability of the commissioner receiving the document on behalf of the taxpayer. So it is an important thing; it is an important measure.I would say though that it does say in new section 13B(3) inserted by clause 73 that “When the Commissioner receives a document bearing the electronic signature of a person unless there are reasonable grounds to suppose otherwise—(a) the document is treated as signed by the person;”. I am not too sure what “reasonable grounds to suppose otherwise” might be. It may be for example that it is so out of character or that it is a piece of communication that is not part of the correspondence that is going on at that point in time. I think it would be quite good to clarify that because “reasonable grounds”—it is the sort of “reasonable man” test in law. But what does define reasonable grounds for accepting or not? I suppose the one question I would have is that what I would not want to see is a taxpayer and the commissioner in court because the commissioner has said “Well I had reasonable grounds for not accepting this signature” and the taxpayer has said: “Well it actually was me.” That is just my one concern—the definition around those reasonable grounds.The other thing is under clauses 71 83 and 87—from 2001-02—this is part of the tax administration area to make it easier for taxpayers to actually get what they need. This is amendments being made to the Tax Administration Act to allow the Commissioner of Inland Revenue to provide a special tax code directly to the Ministry of Social Development to help people receiving New Zealand superannuation or the veterans pension to meet their income tax obligations. What it does is it reduces compliance costs it makes it a lot easier and it requires a whole lot less obligation on behalf of the superannuitant or the veteran.I would also like to talk very briefly about something that Mr Cosgrove mentioned and something Mr Robertson alluded to and this is about disclosure of information. Crucial to this is the intention test. I think it is the only test we can have and if it is proved that someone has intentionally disclosed private information then that person under several different Acts and I think also under their employment contract can have their employment terminated immediately. But the intention test is very hard to prove and a classic case of this is actually under the Income Tax Act where whether or not the sale of a property is subject to income tax is based around the intention of the owner of that property when they bought it—whether the intent was to make a capital gain or to buy it for rental yield. The interesting thing is that the Inland Revenue Department (IRD) has only ever successfully prosecuted one person for not complying with the Income Tax Act due to a misallocation of profits on there. We have to just be sure that the intention test is applied correctly.What I would hope and what I am assuming is going to happen is that the IRD will actually issue a briefing note if not hold briefings with all its staff around what this action means. I trust the IRD I think it does a fantastic job and I would never question the integrity of its staff in any way shape or form but what I would like to see and what I would like to know is that the IRD is taking this as seriously as the select committee took it and as a consequence of that it does make very very clear to its staff the rules and regulations around this. I have a suspicion that they know this anyway but we do need to ensure that there is clarity because the last thing we would want to do is have someone divulge information unintentionally but break the law and then have to be dragged through some sort of employment court or employment dispute because the definition of intention is incorrect.But on that note we do understand that what is happening with Government departments is very important—they are working closer together and we do believe this needs to happen. Whether this is out of necessity—i.e. in Christchurch when different departments had to come together and co-locate or whether it is just out of greater efficiency—