2007 legislation extends the care and management provisions in the Tax Administration Act to include student loan interest.

Section 3 of the Tax Administration Act 1994

The care and management provisions in the Tax Administration Act have been extended to include student loan interest.

Background

Section 6A of the Tax Administration Act 1994 requires the Commissioner to apply "care and management" in the administration of the Revenue Act. This means that the Commissioner must collect the highest net revenue over time that is practicable, having regard to:

  • the resources available to the Commissioner;
  • the importance of promoting compliance with the Inland Revenue Acts; and
  • taxpayers' compliance costs.

It was thought that these provisions applied to student loan interest but, in fact, they only applied to annual student loan repayment obligations.

Key features

The definition of "tax" in the Tax Administration Act has been extended to include student loan interest. This will allow, subject to the above conditions, for interest which has been under-charged because of administrative error to be written off.

Application date

The change came into force on 28 March 2007.