The Press SATURDAY, JUNE 2, 1962. Taxation Injustice

Press, Volume CI, Issue 29838, 2 June 1962, Page 10

The Press SATURDAY, JUNE 2, 1962. Taxation Injustice

A reserved judgment by the Court of Appeal contains much disquieting comment on the Dominion’s tax laws, and particularly on the discretionary powers vested in the Commissioner of Inland Revenue. The taxation system has become so complex, especially since the introduction of P-A.Y.E., that even persons whose affairs are relatively uncomplicated can easily be confused and baffled by its requirements. This is an additional reason—if such were really necessary—for safeguarding as far as possible thv right of taxpayers to resist incorrect and unreasonable demands. Although income tax evasion may be hard to detect, the Government is not justified in condoning arbitrary deviations from the basic principles of law. Because administrative complexities are conducive to genuine mistakes, rights of appeal against tax assessments should be liberal rather than niggardly. It is no reflection upon the integrity, public spirit, or ability of successive Commissioners of Inland Revenue to contend that the Legislature has equipped this office with para-judicial authority far in excess of what might prudently have been separated from the ordinary courts of law. The commissioner is exceptionally well situated to impose and uphold his opinions about the liabilities and conduct of individual citizens In 1960 the Labour Government with the Na-

tional Party’s endorsement, tried to allay public concern about the commissioner’s dictatorial functions, and established a review procedure which in effect transferred to special boards duties formerly discharged by magistrates’ courts. This legislation, however, provided for the review boards’ decisions to be final on questions of fact, though appeals on questions of law could be taken to the Supreme Court; and the then Minister of Finance (Mr Nordmeyer) was careful to emphasise that there would remain various matters on which the commissioner’s personal ruling could not be challenged. It is absurd as well as unjust that, in circumstances such as those of the Maxwell case, the commissioner’s fiat should be permitted statutorily to overrule the principles of common law, and to be set against the judicial process whereby charges of fraud have been held not proved. While much of the Appeal Court’s judgment in the Maxwell case concerns legal technicalities, it has probably made plainer than, ever before in New Zealand tax litigation the in- 1 justice of allowing one man’s opinion, however conscientiously formed, to impute guilty intent so conclusively that the consequences cannot be stayed even by a superior court of record. The Government can scarcely ignore the Appeal Court’s strictures.