Taxman targets website owners

By MICHAEL FOREMAN

The tax department has obtained the personal details of who owns all 80,000 websites registered in New Zealand so it can tax trade over the internet.

In a move with far-reaching implications, the Inland Revenue Department has ordered the company that registers New Zealand sites to hand over a CD-Rom disk containing the names, addresses, telephone and fax numbers and e-mail addresses of the owners of all sites ending in .nz.

The attempt to tax e-commerce has raised privacy fears among among some web businesses.

The Internet Registry of New Zealand (Domainz) says it handed over the information after the IRD said it was a requirement, not a request.

Domainz director Roger De Salas, who prepared the information for the department, was not prepared to comment on the disk's contents.

"It's a transaction between the IRD and Domainz that is completely private. It's just a taxation issue. I'm really mortified that it has got out."

Details of who owns websites are already available on the Domainz website, but only singly and only if the web address is known.

For the first time, the IRD has a complete list of who owns all websites ending .nz, including .co (used by companies), .net (for internet), .org (organisation), .govt (government) and .ac (academic).

The information does not cover the minority of New Zealanders who registered .com addresses with American domain companies.

IRD operations national adviser Neil McCarthy said the focus was on websites trading over the internet. The information would be used to check if companies involved in e-commerce were complying with tax laws. It was limited to data already publicly available via searches on the Domainz website.

But in an e-mail to members of the Internet Society of New Zealand, which owns Domainz, director Keith Davidson said the information had been provided only after the department made it plain that it was a requirement - not a request.

He added that Domainz had charged the IRD for the cost of assembling the information on CD.

Mr Davidson told the Herald yesterday that no warrant had been issued but Domainz had sought a legal opinion before handing over the data.

"As far as I'm aware, this is the first time the IRD have asked for this sort of information. We are obliged to provide it [to the IRD] when it's a reasonable and lawful request."

The IRD has sweeping powers to search for and seize information.

Mr Davidson admitted that the disclosure raised privacy issues and had alarmed some members of the Internet Society.

"A couple of people seemed to think that the IRD were operating in an untoward fashion. I hardly see it as anything sinister."

Some society members say the IRD is being disingenuous in claiming that the information was already publicly available. The information had been provided to Domainz, not the taxman.

Peter Mott, managing director of Auckland internet service provider 2Day.com, pointed out that the Domainz website allowed queries to be made only one at a time, and only if the name of the website was already known.

"There will be people concerned at the privacy issues, probably reasonably so."

Guy Cranswick, analyst with Sydney-based internet research company Jupiter Research, which studies New Zealand, said the IRD's actions were a "significant intrusion into gathering information for control."

The Australian taxman had not been given information that was packaged so neatly.

Links

Domainz

2day.com