Dunne promises new online tax payments to IRD

Revenue Minister Peter Dunne

Inland Revenue is planning to introduce a system similar to on-line banking so taxpayers can keep track of their accounts and make payments easily, Revenue Minister Peter Dunne said today.

He was responding to a report released yesterday by Auditor-General Kevin Brady which said tax debt was growing at a rate that was outpacing the department's capacity to deal with it.

At the end of June last year there were 202,000 cases of tax debt totalling $4 billion, the report said.

The department estimated that total tax debt could more than double within five years unless it took a different approach to managing it.

"A lot of the problem that's arising with debt is the penalty process kicks in, debt starts to mount and people basically freak out at the idea of having to make these payments," said Dunne .

"We want to try to nip that in the bud by making the system much more people-responsive so we don't get the sort of level of out-of-control debt we have at the moment."

Dunne said the department had put in place a number of measures over the years to try to bring down debt and they had worked reasonably well.

"I think the bigger picture now is that the processes we've operated really haven't been given the sort of radical shake-up we're imagining since the late 1950s," he said on Radio New Zealand.

Inland Revenue said in a statement initiatives were already under way and it would also act on recommendations in the report to improve the effectiveness and efficiency of its debt collection techniques.

Brady said his staff looked at how Inland Revenue managed tax debt collection.

"Although Inland Revenue's management of tax debt was satisfactory once debt cases were assigned to its debt officers, I agree with Inland Revenue that its overall approach to tax debt management is insufficient to control the growth in tax debt," he said.

Because the department prioritised what its debt officers worked on, some tax debt cases regarded as lower risk were unlikely to be assigned.

NZPA