Overview of the Telecommunications Levy Framework

New Zealand operates two closely related levies under the Telecommunications Act:

• the Telecommunications Development Levy (TDL), which funds non‑commercial telecommunications infrastructure and services (such as the Relay Service, rural broadband, and emergency calling improvements), and
• the Telecommunications Regulatory Levy, which recovers the Commerce Commission’s costs of administering and enforcing the telecommunications regulatory regime.

The TDL is currently set at a fixed annual amount (adjusted for inflation) and is allocated proportionately among qualifying levy payers based on their qualified revenue from telecommunications services in the preceding financial year.

Who Is Subject to Audit Requirements?

Only “qualifying liable persons” are required to contribute to the Telecommunications Levy. A liable person is an entity that provides telecommunications services in New Zealand using a component of a public telecommunications network and earns more than NZD 10 million in gross telecommunications revenue in the prior financial year.

Once identified as qualifying, a provider must submit detailed financial and ownership information to the Commerce Commission within prescribed timeframes, typically within 60 days of notification.

Information Disclosure and Verification Obligations

Annual Levy Information Returns

Each levy year, the Commerce Commission issues mandatory disclosure templates and instructions that qualifying providers must use to report their qualified revenue and related financial information. This data forms the basis of the Commission’s liability allocation determination, which sets each provider’s levy share.

Providers are legally required to ensure that the information supplied is complete, accurate, and prepared in accordance with the Act and Commission guidance. Supplying incorrect or misleading information may expose the provider to enforcement action under the Telecommunications Act.

Audit and Assurance Requirements

Power to Require Audited Information

While the Telecommunications Act does not mandate a statutory audit of levy returns in all cases, the Commerce Commission has broad powers to verify information provided by levy payers. This includes the ability to:

• require supporting documentation,
• request explanations of revenue classifications, and
• require information to be certified or audited where necessary to confirm accuracy.

In practice, the Commission may request auditor involvement where:

• revenue streams are complex or novel (e.g., satellite or platform‑based services),
• there has been a significant year‑on‑year change in reported revenue, or
• inconsistencies are identified during review or consultation on the draft levy determination.

Role of External Auditors

Where audit or assurance is required, it must be performed by a qualified or licensed auditor under New Zealand law. Statutory assurance engagements in New Zealand are regulated under the Financial Reporting Act 2013 and overseen by Chartered Accountants Australia and New Zealand (CA ANZ), the Financial Markets Authority, and the Companies Office.

Auditors involved in Telecommunications Levy matters typically provide:

• reasonable assurance that reported qualified revenue is consistent with the entity’s financial records, and
• confirmation that revenue has been classified in accordance with Commerce Commission guidance and the Telecommunications Act.

Record‑Keeping and Audit Readiness

Levy‑paying providers are expected to maintain robust internal records supporting their levy disclosures. This includes:

• revenue ledgers and reconciliations,
• intercompany transaction documentation,
• network usage and service classification records, and
• governance sign‑off on levy submissions.

Strong record‑keeping is particularly important because the Commission’s levy determinations are subject to public consultation, and errors may be identified by competitors or other stakeholders during this process.

Consequences of Non‑Compliance

Failure to comply with audit or information‑disclosure requirements can have serious consequences. These may include:

• reassessment of levy liability,
• enforcement action under the Telecommunications Act,
• reputational damage arising from public determinations, and
• increased regulatory scrutiny in future levy years.

The Commerce Commission’s enforcement powers are reinforced by the broader public‑sector accountability and audit framework that applies to the collection and use of public funds in New Zealand.

Emerging Issues and Future Developments

Ongoing regulatory reform, including amendments proposed in the Telecommunications Amendment Bill 2025, is expected to modernise levy‑setting mechanisms and improve consultation and transparency. While these reforms do not remove audit expectations, they are likely to increase focus on consistency, proportionality, and data quality in levy reporting.

As new market participants, such as satellite and international network providers, grow their New Zealand footprint, audit scrutiny of levy disclosures is expected to intensify.