The Inland Revenue Department (IRD) is attempting to distance itself from comments made by National’s new finance spokeswoman over its opposition to the bright line test extension.
In a media stand up on Wednesday, Amy Adams said: “the IRD don’t support [the bright line test] going to five years.”
But an IRD spokesman says Adams’ position “is not strictly true.”
“There was no submission on the topic of the bright-line test extension at the Inland Revenue annual review hearing before the FEC [Finance and Expenditure select committee] on February 21.
“Rather, a committee member asked the Commissioner a question about whether government departments supported the extension of the test, and the answer made reference to IR’s view on the policy extension.”
The spokesman said the IRD only provides policy advice to the Government. “We don’t necessarily provide a position for or against.”
He said he was “not quite sure how [Adams] could make that claim.”
However, in a regulatory impact statement (RIS) prepared by the IRD and Treasury for the Minister of Finance and Revenue Minister, the IRD said it preferred leaving the bright-line test at two years.
Its main argument was that it believed extending it to five would capture people the policy wasn’t aimed at.
Adams referred to this part of the RIS, which was released last month, when questioned on the issue:
“The Treasury notes that the risks relating to over-reach and lock-in are unable to be quantified and therefore it is difficult to assess their significance in relation to the Government’s objectives for extending the bright-line test.
“The IRD considers that two years is the better bright-line period, mainly because this reduces over-reach."
The RSI also warned the Government that the high level of non-compliance so far seen with the bright-line test (which is at roughly 50%) will continue if it is extended by another three years.