Why New Zealand's tax policy is gold standard

 At a glance

New Zealand’s Generic Tax Policy Process (GTPP) has been in place since 1994 and is well regarded for its focus on consultation through public engagement.

Under the GTPP, the development of tax policies follows a five-stage system: strategic, tactical, operational, legislative and implementation/review.

Public engagement is encouraged at each stage, with the goal of early and frequent consultation, as well as improved transparency and accountability.

“The purpose of interacting with the public is to improve customer, policy and regulatory outcomes, and to inform stakeholders in advance of regulatory changes,” the IRD says. 

“Submitters will often have better access to information on the size and nature of the problem and how the issues can best be solved. 

“Consultation can also enhance voluntary compliance, because it allows interested parties more time to understand why there is a need to change, and more time to adjust to changes.” 

In the third – operational – phase, formal detailed consultation currently takes place during detailed policy design.  

“During the submission period, officials have intensive face-to-face meetings with affected taxpayers.” 

Is the GTPP working?

There’s been strong support for the GTPP over time from other countries, including Australia, although a similar system is yet to be adopted elsewhere.

However, Adrian Sawyer FCPA, professor of taxation at the University of Canterbury Business School and member of CPA Australia's New Zealand Tax Committee, highlights a major issue with the GTPP – using the framework isn’t enshrined in New Zealand legislation. 

Sawyer points out that there have been numerous recent changes made to New Zealand tax laws, particularly in relation to COVID-19, without any public consultation. 

“Setting aside [GTPP] can be done with relative ease with no apparent direct consequences. 

"The purpose of interacting with the public is to improve customer, policy and regulatory outcomes and to inform stakeholders in advance of regulatory changes."

— Inland Revenue Department

“A consequence of the GTPP is that it increases the time it takes to develop and implement tax and social policy,” the IRD says. 

REF: CPA

SMSF super star

One piece of advice 

Be yourself in everything that you do. Your branding and the way you run your business is all reflected in your core values.

Your ideal clients will be the ones who connect with you, so identify them early and don’t try to be anyone except yourself.  

With no budget for advertising, she set up her own Facebook page and made video posts for social media. She wrote procedures on the go and built her business one client at a time.

“You just have to back yourself sometimes. There will always be the doubters but sometimes you have to take that risk. I had no money, no loans, I didn’t have equipment or staff. It was my only source of income, so I had to make it work. I literally built it from scratch.”

O’Connor runs a public practice in Perth, Western Australia, specialising in self-managed superannuation funds (SMSF).

Retirees and high-income earners make up most of O’Connor’s client base, but ethical investors, young professionals and small-business owners are also on her books, as are other accountants.

O’Connor began her career in auditing, including a stint with the Office of the Auditor General for Western Australia, before joining a public practice as a taxation accountant.

As well as her licence, O’Connor needed to obtain her Diploma in Financial Planning and public practice certificate through CPA Australia before taking the chance on her dream with an attitude of hard work and creative thinking.

Ref: CPA