Category: Articles

REVENUE ALLOCATION UNDER THE MRRT: ECONOMIC ASPECTS

By Henry Ergas and Alex Robson

The Minerals Resources Rent Tax (MRRT) is intended to tax the rents properly attributed to minerals at the time and place of their extraction (ie at the mouth of the mine). However, mining operations involve a degree of vertical integration that in some cases extends from mine to port. We examine the approach adopted in the MRRT to allocating the resulting revenues as between the taxing point and the downstream operations and show that it both lacks economic rationale and is likely to distort build/buy decisions.

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ONLINE SALES AND AUCTION SITES, ISOLATED TRANSACTIONS AND THE INCOME TAX ACT 2007 (NZ)

By Andrew Maples

In 2007, David Beckham was in New Zealand to play an exhibition football match. While in Wellington, he dined at Nando’s restaurant. Moments after finishing his meal a mystery diner swiped the football star’s scraps and cutlery. The items were subsequently listed for sale on online auction site Trade Me. This article considers whether profits derived by the enterprising diner from this isolated transaction may be assessable under the Income Tax Act 2007 (NZ). Specifically, the article focuses on the application of s CB 32 (Property obtained by theft), s CB 4 (Personal property acquired for purpose of disposal), and s CB 3 (Profit-making undertaking or scheme). The article concludes that the intrepid diner may be subject to tax on her profits under two of these provisions.

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DEMOCRATIC DISCOURSE, TAXATION AND HYPOTHECATION

By Jonathan Barrett

This article considers taxation from a perspective of democratic discourse and uses propositions for hypothecated taxes to illustrate transparency and government accountability. First, contemporary sovereignty in relation to taxation is sketched. Michel Foucault’s concept of ‘governmentality’ and its principal implications for taxation are taken into account. Second, Jürgen Habermas’s model of discursive democracy is outlined. Third, the principle of accountability and the practice of transparency are outlined. It is concluded that hypothecation is unlikely to enhance accountability in taxation, which, from a perspective of discursive democracy, should be pursued through an open and honest discourse between accountable government and its citizens.

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