Although Rasmussen said at this stage he was unsure about the legality of the move, he felt that it reeked of government overreach.
“What I fear here is the government has belittled the office of the collector of revenue,” Rasmussen said.
“By doing this it’s basically saying to that office you are no longer independent, you’re no longer able to do the things you are legalised to do and pursue people who don’t pay up their taxes.”
CINews last week asked current Finance minister Mark Brown whether any government departments or ministries were amongst the non-compliant taxpayers, who will have their tax written off, and if unpaid PAYE was amongst the government debt due to be written off.
Brown claimed secrecy provisions of the Income Tax Act prevent the Revenue Management Department (RMD) from disclosing tax specific information to him or to the media, even though parliamentary privilege would allow him to name such parties in Parliament.
“However, in general terms,” Brown said, RMD have advised that some government departments/ministries have outstanding PAYE reconciliations. For this reason, it is likely PAYE relating to those government agencies will be amongst the written off debt,” Brown said in answers to CINews questions.
While tax is meant to be an area that is separate from government involvement, Rasmussen feels that the move signals to the community that the government has shown they will change something if they feel like it.
He also questioned what the role of the tax collector would be now, and believed that people could be aggrieved at being chased for unpaid taxes when others were given a free pass.
“It kind of makes him redundant, and it kind of makes a mockery of the financial reform of the country,” Rasmussen said.
“One of the things that the Democratic Party in the past has tried to avoid is to take the Cook Islands back into that time where interference by politicians was rife.
“That’s what caused the crisis of the early 1990s, because government was being run by ministers and politicians in a way that whenever they wanted a change, they would do it themselves.”
While he said he still wanted to investigate the matter further, the idea that government could be exempt was absolutely immoral.
Rasmussen said what made the move even worse was that it flies in the face of what current Finance minister said this week in Parliament.
“The minister said that this is about forgiveness, forgiving those people in difficulties, but you would not put government departments or ministries in that category.
“Furthermore, it’s not forgiving if you do it for your own ministries, that’s simply taking away revenue that’s supposed to come in.
“In that sense, I think it’s absolutely wrong.”
It is also understood that the tax write off is considered by some to be unconstitutional because it favours certain citizens over others, and that legal action based on the constitution may be brewing.
- Conor Leathley