Penk ChrisCHRIS PENK (National—Kaipara ki Mahurangi): Oh thank you very much Mr Chair. Just a brief contribution from me if I may in this Part 4 of the Taxation (Annual Rates for 2021-22 GST and Remedial Matters) Bill. I draw the attention of the committee including the Minister if he'd so kind to new section 141EE—Echo Echo—which is within clause 160 of the bill. So this is the penalty for acquiring or possessing electronic sales suppression tools and I do acknowledge that the Minister previously spoke—I think it was the Minister who previously spoke about this when we were last considering this as a committee and I don't wish to rehearse that same ground in general terms about the sale suppression tools. But my query is rather why the offence has been framed in the way that it has. Because what we've got here is a penalty for acquiring or possessing the tools but then we've got essentially an exemption that says that it doesn't apply when the person hasn't used the suppression tool in the business. And I don't understand why we wouldn't simply have an offence that says it's an offence to knowingly use a—Hon David Parker: Which clause?CHRIS PENK: Oh I beg your pardon. It's clause 160 in answer to the Minister's question about where it is that I'm looking at that. I just seek his confirmation he's been able to find where I'm referring to? Yep? Thank you. So just a question really and it's probably reasonably straightforward and he might be able to dispose of it quite easily but I'm wondering why we're framing the offence as possession notwithstanding that possession itself isn't going to make out the offence. It seems to me that we're trying to get to a place where we are penalising someone for acquiring one of these tools for the purpose of evading tax essentially or reducing the amount that should legitimately be paid but it seems to me that that would be a much more straightforward matter if we were simply to have an offence of using it and knowingly using it.And then the other question which related to the same provision was about the penalty for an offence under this section and that's a penalty of $5000 and I just wonder where that figure was derived from. Because it seems to me at least theoretically possible without having done any numbers to support it that the value of the tax evaded might be higher than $5000 if there was sufficient revenue for that to be the case. So any guidance that the Minister can provide in that regard would be much appreciated.Hon DAVID PARKER (Minister of Revenue): My understanding of the intention of new section 141EE as inserted by clause 160 of the bill is to cover the circumstance where someone acquires a business and the business that they acquire had the software but they couldn't reasonably have known that. Therefore although they are legally in possession of it they didn't know and therefore they ought not to be caught by the penalty.In respect of the penalties question my understanding is that there is a civil penalty of $5000. The criminal penalty can be up to $50000 and both of those would be separate from the penalties that would be payable in respect of unpaid tax if in addition to that there had been tax fraud which had led to the underpayment of tax which could lead to tax penalties under the penalties regime and use of money actually quite separate from the criminal penalties that would apply to the possession of software. That said that maximum penalty for the courts I think when someone was presenting the case on behalf of the accused—the penalties that they were liable for under their tax might be relevant to the issue as to what penalty the courts actually imposed.