'Sloppy’ tax law amended

Press, 17 May 1989, Page 5

'Sloppy’ tax law amended

PA Wellington A tax legislation muck-up has meant national superannuitants have had their pensions illegally taxed for the last two years, according to a Wellington pensioners’ group. The Inland Revenue Department, while admitting an anomaly in the legislation, disputes the pensioners’ interpretation. Amendments to tax legislation in October, 1986, gave national superannuation an exemption from income tax in the exemptions

section. This was done by omitting to mention it among the types of social security benefit that did not qualify for exemption, the Wellington National Superannuitants Association’s publicity officer, Mr Jack Thessman, said this week. Recently the Government corrected the anomaly in the Income Tax Amendment Bill No. 7.

“We didn’t expect to get our income tax returned. We just wanted to point out the sloppy legislation which was not picked up by anybody, not even the

Opposition. The Government was forced to put in retrospective legislation,” he said. An Inland Revenue Department spokesman said the omission was a drafting error and conceded the 1986 legislation was ambiguous. The Inland Revenue interpretation was that it was not possible to say taxing of national superannuation was illegal. This was mainly because another section in the legislation' — on assessable incomes — did include national superannuation.