Miscellaneous 2007

Complexity of New Zealand's tax laws: An empirical study

Source: Australian Tax Forum Journal Article

Published Date: 1 Jan 2007

New Zealand’s income tax legislation has been identified as unnecessarily complex and detailed. In response to this concern, the income tax legislation was reorganised and is undergoing a complete rewrite. The recent enactment of the Income Tax Act 2004 (ITA 2004), which includes the rewritten Parts C to E, completes phase three of the rewrite process. Consistent with previous studies, this analysis uses four readability measures - Flesch Reading Ease Score, Flesch-Kincaid Grade Level Index, average sentence length, and percentage of passive sentences - to examine the readability of New Zealand’s ITA 2004 and other tax related materials, such as Tax Information Bulletins and binding rulings. Although the rewrite process is not fully complete, the results from this study show that the readability of the ITA 2004 has improved significantly as indicated by the Flesch Reading Ease Score and average sentence length.

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Miscellaneous 2007

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