Legislation modification power
Sometimes provisions in the Inland Revenue Acts seem to contain errors, do not achieve their intended purpose, are inconsistent with other provisions, or are ambiguous.
Clear and effective legislation is vital to the integrity of the tax system, and the Minister of Revenue or the Commissioner of Inland Revenue now has the power to make temporary modifications or exemptions to the Inland Revenue Acts. Generally this will only be exercised if doing so would be beneficial to taxpayers (at their option).
These new powers, found in sections 6C to 6G of the Tax Administration Act 1994, are exercised either by:
- the Minister of Revenue recommending an Order in Council to the Governor-General (section 6D), or
- the Commissioner issuing an exemption (section 6E) in order to have effect.
The adoption by affected people of any such modification or exemption is optional and they are intended to help taxpayers to meet compliance obligations where appropriate, or to ensure that the law has the intended effect. They will also be limited to a maximum of 3 years following creation of the rule (although some may also have retrospective application).
How you can raise an issue
If you think that a provision in the Inland Revenue Acts is not operating as intended, contains an error, is ambiguous, or is inconsistent with other provisions, you can raise possible issues with Inland Revenue by using our dedicated email address:
When doing so, please discuss the following:
Which statutory provision is affected?
What is the provision of the Inland Revenue Acts that you think the legislative modification power should be used to modify?
What is the nature of the problem?
For example, is there an obvious error or inconsistency? Explain the issue and the impact that it has. Examples would assist.
What modification do you think should be made?
Outline the modification you think would be needed to resolve the issue.
Does the proposal match the intended purpose of the relevant provisions?
The intended purpose or object of the provision might be shown in publicly available documents, such as the explanatory memorandum, relevant committee reports, and other contemporary documents that accompanied the original enactment or subsequent amendments to the relevant provision which clearly identify the intention of the legislation.
You can also provide any other additional information that you think would assist us.
What happens next
A specialist team will look into the issue to determine whether it is appropriate to use the legislative modification power.
If the issue raised falls within the scope of the new rules, it will be considered in detail. There will be public consultation on any proposed use of the power, and often discussions with submitters and others to ensure that we have fully understood the issue.
If the powers are used and either a modification is made by Order in Council, or the Commissioner issues an exemption, the results will be published. Links will be available from this page.
Each instrument will explain what, if any, steps will be needed for affected people to opt to take advantage of the rules, and whether or not they have retrospective application. They are likely to be accompanied by further general explanation. If necessary, the process to opt-out of the modification will also be explained.
If a legislative modification applies to prior periods, and a return has already been furnished, the Commissioner will be able to make amendments on request.
Further information will be provided on this page in due course.