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Air New Zealand legal cost details still up in the air

Monday 6 February 2023 | Written by Al Williams | Published in National, Travel

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Air New Zealand legal cost details still up in the air
The Departure Tax Amendment Bill 2023 requires the payers of the Departure Tax – which is the airlines such as Air New Zealand – to file monthly Departure Tax returns. Picture: CAMERON SCOTT/ 23010206

New information is likely to emerge this week as the total cost to Cook Islands taxpayers in a multi-million-dollar tax case involving Air New Zealand is still to be revealed.

Cook Islands News has again approached Financial Secretary Garth Henderson with more questions as the publication now understands Government has been hit with an estimated $275,000 bill to cover Air New Zealand’s legal costs in a case involving the airline and the Revenue Management Division.

On Friday Henderson said MFEM would likely get back to the newspaper around Wednesday after the publication sent him written questions.

“Until the commercial confidentiality issues are resolved we can’t give more information than we have already provided on some aspects.”

Cook Islands News asked him for a specific amount paid to cover Air NZ legal costs, what it cost to cover legal costs in going forward with court action, who made the decision to press ahead in litigation, who took advice to press ahead with the matter, and who gave them the advice to press ahead.

Neither Prime Minister Mark Brown nor the Finance Ministry have so far been willing to divulge costs on top of the $5.4 million paid back to Air NZ on August 5 last year.

Air NZ also remains silent.

Cook Islands News understands the Revenue Management Division had been advised not to tax Air New Zealand, but sought further advice from New Zealand lawyers who then advised them to pursue the matter.

Cook Islands News contacted the Ministry of Justice on January 12 requesting details pertaining to the case and was told by a staff member on Thursday, January 19, a Judge was reviewing the case file before it is released to the publication.  

Financial Secretary Henderson then urged patience while his submissions sat with Cabinet on the costs. 

Late last month, a heavily redacted 51-page document released by the courts did not reveal costs.

In the redacted judgement by former Chief Justice Sir Hugh Williams, originally released in July, Air NZ objected to Revenue Management Division assessments on the grounds they were wrong in fact and law.

As Cook Islands Revenue Management Division came under scrutiny following legal action by Air New Zealand, which resulted in the country owing the airline money in a tax refund, in a face to face meeting on January 13, Henderson and deputy tax director Alan Richardson said the Ministry of Finance and Economic Management acknowledged resources are stretched.