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Income Tax (Adjustment of Taxable Income Ranges) Amendment Bill (Consistent) [2021] NZBORARp 22 (5 May 2021)

Last Updated: 20 May 2021

5 May 2021

Hon David Parker, Attorney-General

Consistency with the New Zealand Bill of Rights Act 1990: Income Tax (Adjustment of Taxable Income Ranges) Amendment Bill

Please find attached our advice about the consistency of this Bill with the New Zealand Bill of Rights Act 1990. We have concluded that the Bill appears to be consistent with that Act.

Details of the Bill

Recommendations

Contacts for telephone discussion (if required)

Elspeth Knewstubb Lead Bill of Rights Advisor Policy Group		Hon David Parker Attorney-General / / 2021

5 May 2021

Hon David Parker, Attorney-General

Consistency with the New Zealand Bill of Rights Act 1990: Income Tax (Adjustment of Taxable Income Ranges) Amendment Bill

Purpose

1. We have considered whether the Income Tax (Adjustment of Taxable Income Ranges) Amendment Bill (the Bill) is consistent with the rights and freedoms affirmed in the New Zealand Bill of Rights Act 1990 (the Bill of Rights Act).
2. The Bill amends the Income Tax Act (the Act) to require a review of income tax brackets every three years and adjust the brackets as necessary for inflation.
3. Clause 4 of the Bill inserts a new definition of specified dollar range into s YA 1 of the Act which defines what tax brackets will be reviewed and adjusted. This includes the taxable income, fringe benefit, and employer’s superannuation contribution tax ranges set out in Schedule 1 of the Act and the prescribed investor rate tax range set out in Schedule 6 of the Act.
4. Clause 5 of the Bill inserts new ss YA 2A and YA 2B into the Act. New s YA 2A requires the Commissioner to review all specified dollar ranges 12 months after a general election to determine if they should be adjusted to reflect inflation over the past three years. New s YA 2B provides that adjustments to specified dollar ranges can be made through regulations by Order in Council on recommendation by the Minister of Finance. The Minister may decline to recommend adjustments. If so, new s YA 2A(5) requires that the Minister inform the House of Representatives and explain their reasons for declining to recommend adjustments.
5. We have concluded that the Bill appears to be consistent with the rights and freedoms affirmed in the Bill of Rights Act.
   

Jeff Orr

Chief Legal Counsel Office of Legal Counsel