Inland Revenue's Draft Interpretation Statement (IS)(PUB 003050) on Avoidance draws attention to the key focus of the Commissioner's contention concerning the existence of tax avoidance under s BG 1 of the Income Tax Act 2007. Specifically, the 'ultimate question' to be answered is that posed by the Supreme Court in Ben Nevis, which goes to the core of the Parliamentary contemplation test, namely:

The ultimate question is whether the arrangement, viewed in a commercially and economically realistic way, uses or circumvents the specific provisions in a manner that is consistent with Parliament's purpose.

Ben Nevis Forestry Ventures Ltd v CIR [2008] NZSC 113, [2009] 2 NZLR 289 (SC), at para 109

REQUIRED:

Discuss how you see the Commissioner's proposed 'new' focus affecting the level of certainty for taxpayers. How can the views about certainty, that have been expressed by the New Zealand courts, be justified in the context of a self-assessment tax system that is designed to encourage voluntary compliance? To what extent should taxpayers be given certainty with respect to being able to be confident in the correctness of their tax position(s)?