Statement of Intent 2008-11: Part one - Introduction
From the Commissioner
Inland Revenue seeks to improve the economic and social wellbeing of New Zealanders. We collect revenue and distribute social policy payments, which contribute to the Government's priorities of economic transformation, families-young and old, and national identity. We are also helping to achieve some of the Government's sustainability goals-especially our contribution to moving the public sector towards carbon neutrality by 2012.
Recent World Bank research ranked New Zealand as second in the OECD and ninth in the world for the ease of paying taxes, ahead of many of our trading partners.1 This reflects positively on the administration of New Zealand's tax system, although we can always make improvements.
Effects of a changing environment
Inland Revenue must be responsive to a rapidly changing environment, which puts pressure on the effectiveness of our services. Our challenges include:
- implementing and delivering new initiatives that diversify our functions and add to our workload
- improving compliance in an increasingly complex environment, where threats to our tax base may arise from global trends in business practices
- strengthening our people capability and infrastructure to ensure that we can continue to deliver services and achieve our outcomes.
Government initiatives
A key aspect of our changing environment is our need to be able to respond appropriately to new government initiatives. That includes providing policy advice and then implementing any legislative changes. The 2007 Budget announced a number of new government initiatives including changes to charity rules, the lowering of the company tax rate, R&D tax credit and an expansion of KiwiSaver. Implementation of the R&D tax credit will be a key priority for Inland Revenue.
New Zealanders have shown strong interest in KiwiSaver, with 542,338 enrolled as at 9 April 2008, and these numbers will increase in the coming years. Inland Revenue has worked hard to deliver KiwiSaver, and implement the enhancements announced in Budget 2007, including the new employer contribution component from 1 April 2008.
Improving compliance
Our tax system relies on high levels of voluntary compliance and community confidence in our administration. We are constantly seeking ways to make it easier for New Zealanders to comply voluntarily and at the same time, we conduct research and analysis to identify and manage compliance risks, wherever they arise. We prioritise risks for appropriate action and are taking a more integrated approach to compliance improvement, incorporating education, proactive customer contacts and media communications, in addition to other interventions, such as audit and collections activity.
Our environment is increasingly influenced by the pace of globalisation. We participate actively in international tax organisations, and collaborate with other tax authorities, as part of our response to managing tax risks. In early 2008, the OECD's Forum on Tax Administration2 concluded that revenue authorities should build enhanced relationships with large corporate taxpayers and tax intermediaries, and work more closely together to combat aggressive tax planning. Inland Revenue supports that conclusion.
Organisational capability
Our ability to achieve our outcomes relies on having a highly skilled, knowledgeable workforce. Our people also need excellent infrastructure, which gives them the right tools to do their work, and increasingly New Zealanders want access to technology-based self-service options when dealing with us.
We will continue to provide training and learning opportunities for our people. We want to be an employer that attracts and retains excellent employees and we have been successful to date. Our retention rates have stayed high in the strong New Zealand labour market, but we must continue to work hard on this.
Looking to the future, our systems and infrastructure need to become more flexible and adaptable. This is important for us to be able to respond to our changing environment and expanded responsibilities. This will be an important Inland Revenue priority for 2008-11.
Conclusion
This Statement of Intent covers the period 2008-11 and I am confident Inland Revenue has the capability to continue to achieve our outcomes for government and all New Zealanders. I also believe we must manage compliance risk well, invest in people capability, and transform our business systems if we are to continue as a high-performing organisation in the years beyond 2011.
Robert Russell
Commissioner and Chief Executive of Inland Revenue
1 The World Bank's Doing Business 2008 research ranks 178 countries. For more details see "Organisational health" in this report.
2 The fourth meeting of the Forum on Tax Administration (FTA) was held in Cape Town, January 2008. It focused on a study into the roles of tax intermediaries, which was initiated at the third FTA meeting in Seoul, in 2006.
Date published: 30 Jun 2008
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