The IRD will be looking more closely at chasing up tax cheats. Photo / 123rf
The IRD will be looking more closely at chasing up tax cheats. Photo / 123rf
Inland Revenue will spend $29 million - allocated in the last Budget - on chasing up tax cheats.
The department will be targeting a broad range of people, from students to multi-nationals and crypto traders.
Inland Revenue (IR) said it would pursue people who, due to challenging circumstances or adeliberate decision, have not met their tax obligations.
The Commissioner of Inland Revenue, Peter Mersi, said about 90% of its “customers” have no tax debt, and they find meeting their obligations straightforward and easy.
“We know some people have difficulties meeting their tax payments, and we want to help them get back to being fully contributing taxpayers,” he said.
“We will also have additional people on board to investigate and undertake audits,” he said.
He noted debt had been rising.
“Covid-19 and the subsequent challenging economic conditions have been significant contributing factors, with some businesses suffering cash flow problems choosing to prioritise other payments over tax,” he said.
However, he said tax obligations must be met.
IR was prioritising its compliance work to follow up outstanding returns, collect overdue debt, and to prosecute taxpayers where necessary.
Specifically, Mersi said the department would be taking a closer look at a range of areas including the hidden economy, the retail sector and trust compliance, as well as increasing its audit activity.
”Inland Revenue will also work to reduce systemic risks in areas such as cryptocurrency, electronic sales suppression tools, organised crime and corporate restructures.”
Electronic sales suppression tools are designed to evade tax by understating or completely changing revenues.
Mersi said the IR plans to increase debt collection from overseas-based student loan debtors and people who took out small-business cashflow scheme loans.
IR would be increasing compliance in this area, including a new campaign where it will contact overseas-based student loan borrowers who own property in New Zealand.
“For both multinationals and corporate restructures, tax issues are complex and the amounts at risk are large.”
IR will be making unannounced visits to building sites. Photo / NZME
IR is therefore increasing audits of multinationals and corporate restructures.
“We know there are around seven millioncrypto assettransactions, worth nearly $8 billion, by 227,000 New Zealanders,” Mersi said.
“We’re seeing significant under-reporting of income from some of these people.”
IR will be progressively approaching these traders to let them know some of the information it had on their business and giving them a final chance to report their income.
The department encouraged people who have a tax debt to “talk to us early to avoid harsher outcomes”.
