Carter David: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — In Committee 
Carter David: Taxation (Annual Rates Venture Capital and Miscellaneous Provisions) Bill — In Committee 
[Volume:622;Page:17367] 
Hon DAVID CARTER (National) 
: 
 I want to go straight to clause 194 “Refund of excess tax”. I want the Minister to recall the earlier questions that I raised in the debate on Part 4 with regard to the change—to 4 years—in the time limit on the commissioner’s ability to consider whether excess tax had been paid and if it had to refund it. The Minister helpfully considered my question and sought advice. As I understand the answer he gave he said that I could rest assured that he was not as tight as I thought he was and that if the commissioner considered that a mistake had genuinely been made then the taxpayer still had the 8-year period to lodge an application with the commissioner have it considered and provided that it was within the 8-year time frame have the commissioner refund the excess tax paid. 
I have considered carefully that explanation with regard to the question that I raised in the debate on Part 4 and I am now raising it again with regard to clause 194. My concern is that I am struggling to find a reason why the 4-year limit would apply. It seems to me that if after the event a taxpayer is in the position of finding that he or she has paid an excess amount of tax then quite obviously a mistake has been made. Where else could a situation arise where a taxpayer subsequent to the event is able to consider—presumably with professional advice from an accountant—that he or she has paid an excess amount of tax to go back to the commissioner and to prove it through a due process? Where else would that not be because a mistake had been genuinely made? So I simply ask the Minister for a more fulsome explanation. 
Hon Dr Michael Cullen 
: Which clause is this? 
Hon DAVID CARTER 
: I tell the Minister that I am talking about clause 194 and I am happy to rearrange the argument again for him. I would certainly also ask him to elaborate on the answer he gave earlier on the clause in Part 4 that I spoke to. My point is that the answer the Minister gave was that I had nothing to fear and that if a mistake was genuinely made then the taxpayer had the 8-year period in which he or she could satisfy the commissioner that it was a genuine mistake and receive back the excess tax. The very point I am raising is when does the 4-year limit apply. Why else would a taxpayer go to the commissioner and say: “Sorry we have a mistake here. We have paid an excess amount of tax and we want it back.” if it was not a genuine mistake? I am struggling to think of a situation. There may be a legitimate explanation from the Minister and I am thankful that he is now seeking advice but why else would a person ever find that he or she had paid an excess amount of tax if that person had not made a mistake? It just defies logic. 
I see that there is a lot of activity around the officials’ desk so it is certainly something that is worrying them. It is important that we get tax law right; it is so important and I see Steve Chadwick is agreeing. The Minister’s explanation on an earlier part is relevant to Part 5 because of clause 194 but it does seem as if the explanation which was genuinely given may not have fully answered the questions I raised. If the Minister is prepared to take a call now I need not outline the argument yet again but we simply want to know the situations where the 4-year limit applies. I consider that the 4-year limit can apply only in the situation where the taxpayer has made a genuine mistake but the Minister in his explanation to the Committee earlier this evening said that if a genuine mistake has been made then the taxpayer has 8 years to pursue it. It seems incongruous. The Minister has an answer and if he is prepared to explain it I am happy to receive it.