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Complexity of New Zealand’s income tax legislation: The final installment


New Zealand’s (“NZ’s”) income tax legislation has been criticised for many years for being difficult to read and understand. It has also been described as unnecessarily complex and detailed. In response to this concern, the NZ Government committed itself to a complete reorganisation and rewrite of the income tax legislation. The recent enactment of the Income Tax Act (“ITA 2007”), which includes a complete rewrite of Parts F to the end of the Act (Stage Four of the rewrite process), marks the completion of the rewrite project. To provide for consistency and comparability with prior studies, this study employs four readability measures which include: the Flesch Reading Ease Score, Flesch-Kincaid Grade Level (“F-KGL”) Index, average sentence length and percentage of passive sentences to examine the readability of New Zealand’s ITA 2007 and other tax related materials, such as Tax Information Bulletins (“TIBs”) and binding rulings. Given that the completion of Stage Four of the rewrite process marks the end of the New Zealand rewrite project, this study intends to reflect on the overall success of the NZ Government’s effort in achieving its tax simplicity goals in the context of improved readability. The results from this study highlight significant improvements of the readability scores of Parts F to the rest of the Act since the enactment of the ITA 2007.


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