Inland Revenue reports Auckland company to credit agencies over size of its tax debt

The Inland Revenue Department has reported an Auckland company to credit agencies over the size of its tax debt. Photo / File

An Auckland company has become the first to be reported by the Inland Revenue to credit agencies over the size of its tax debt.

The department was given the power to disclose a company's tax debt with approved agencies earlier this year in an effort to give other creditors better protection.

Inland Revenue Collections Manager Stuart Duff said: "The law now allows us to pass this information on to credit agencies if the debt is higher than $150,000. Anyone running a check on a company will then be able to see these details.

"This company in Auckland has significant PAYE and GST debt but has chosen to ignore us despite being been given every chance to do the right thing.

"Now we have the ability to report the debt so fellow creditors can make informed decisions."

The new powers have already proved to be a useful deterrent for companies in a similar position. Twenty seven have successfully negotiated arrangements to pay off their debt, while eight firms have cleared the outstanding amount in one hit.

Duff says this is an effective measure as it takes away the opportunity for a company to hide behind its tax debt.

"This is how debt reporting happens in the commercial world so it's good for us as government debt collectors to have this ability too.

"There are more cases in the pipeline, which meet the same criteria as the company in Auckland.

"However, we hope businesses will make the appropriate effort to clear their tax debt so that we don't have to use this tactic more often."