Tax records to be kept confidential, says Govt.

Press, 27 November 1982, Page 11

Tax records to be kept confidential, says Govt.

Parliamentary reporter The Government would not change the law to allow the Attorney-General, the Minister of Finance, and law enforcement agencies access to tax records, the Minister of Finance and Acting Minister in charge of Inland Revenue, Mr Muldoon, has said in Parliament. Among a series of questions put on tax evasion, the Opposition had asked whether the Government would follow a recommendation made by - the Costigan Royal Commission of Inquiry, in Australia. Mr Muldoon said the Inland Revenue Department would continue to keep tax records confidential. He confirmed that this would apply even in cases where there had been earnings from drug dealings. Answering another question. Mr Muldoon said that the penalty provision included in all inland revenue

acts had been reviewed in the last five years. The department would continue to review the penalties to keep them up to date. He said the department was researching a suggestion from the Task Force on Tax Reform that continuing monthly penalties should be introduced for the late payment of tax. However, such a method would require complex administration. The Opposition also asked why penal tax of $11,600 was imposed on the San Fransico Bath House (1974), Ltd, after it evaded $98,981 in tax, and why penal tax of $5OO was imposed on F. E. Osborne, Ltd, for offences involving the evasion of $38,551. Mr Muldoon said he could not reveal details of indivi-

dual cases because taxation records were confidential. However, he could say that penalties for tax evasion related only to the part that was shown to have been wilfully evaded. Mf Muldoon said the department was aware of details in the Costigan report about a tax avoidance device called “bottom of the harbour schemes.” Under such schemes paper companies are established but disappear before they haye to pay any I tax. The “bottom of the harbour” reference is to the Australian practice of dumping all documents relating to the companies. , ■ Mr Muldoon said the department was watching for this ploy in New Zealand.