Information sharing between Inland Revenue and Customs

Subsection 81(4)(fc) of the Tax Administration Act 1994, sections 280J, 280K and 280L of the Customs and Excise Act 1996, subsection 103(1C) and Schedule 3 of the Privacy Act 1993

Rules have been introduced to allow information sharing between Inland Revenue and the New Zealand Customs Service. The purpose of information sharing is to allow Inland Revenue to identify when certain persons with outstanding child support debt (liable persons) are entering or leaving New Zealand.

Background

At present, outside of its reciprocal agreement with Australia, New Zealand has limited authority to enforce payment from liable persons who are overseas. This highlights the importance of Inland Revenue having the ability to contact liable persons when they are in New Zealand to make arrangements for the payment of their outstanding child support liability.

Expedient recovery action is often required while a liable person, who may be living overseas, is still in New Zealand. Inland Revenue currently has the ability to obtain an arrest warrant to detain liable persons who attempt to leave New Zealand to avoid child support liabilities. However, this power is restrained by being reliant on third parties advising Inland Revenue when a liable person has arrived in, or is about to leave, New Zealand. In addition, Inland Revenue often does not have New Zealand contact information for liable persons living overseas.

Changes have been made to help Inland Revenue identify when liable persons enter and leave New Zealand. If a liable person is known to be in New Zealand, more effective steps can be taken to recover outstanding child support before that person subsequently attempts to leave the country.

Key features

The new rules allow for an information match of child support information between Inland Revenue and Customs.

Inland Revenue will provide Customs with the names and other identifying information of liable persons. An information match will occur by Customs comparing this information against arrival and departure information it holds for the same persons. If Customs has arrival or departure information relating to any liable person, it will supply Inland Revenue the information relating to that person.

This information will give Inland Revenue the opportunity to take the administrative and legal steps necessary to recover outstanding debt from liable persons when they are located in New Zealand and, if necessary, take steps to prevent liable persons from subsequently leaving New Zealand to avoid meeting their child support obligations.

The Commissioner of Inland Revenue and the Chief Executive of Customs will enter into an agreement to determine the frequency, form and method for the exchange of information.

Application date

The changes will apply from a date to be fixed by the Governor-General by Order in Council or 1 April 2009, whichever is earlier.