Inland Revenue has pulled in almost $12 for every dollar it has spent on chasing money it is owed in the last year, its latest annual report says – and its efforts have included arrest warrants and prosecutions.
The tax department has been stepping up efforts to pull in overdue tax, which is estimated to have reached $10 billion.
Its methods include making direct deductions from bank accounts and using third-party debt collectors.
IRD said it had issued 88,367 deduction notices for overdue debt in the course of the year.
It had also made 17,940 visits to business premises and worksites, opened 7641 audits, had 28,530 voluntary disclosures from customers, it had issued 17 arrest warrants and 80 warrants to access premises, initiated 50 prosecutions and completed 30.
It said it had $1.4b in revenue in its latest year, a return of $11.81 per dollar spent, and a big lift on the $9.50 in the previous year.
“In Budget 2025, we were allocated an additional $35 million in permanent annual funding for compliance and collection activities. We were also allocated $26.5 million to continue activities that had been supported by time-limited funding due to end in June 2025,” it said in a statement.
“And we are seeing positive results from focussing on high-risk sectors including property non-compliance, trusts, organised crime and the hidden economy, and making new uses of data and insights to better target our efforts.
“These results mean fairer outcomes for taxpayers and stronger confidence in the tax system. Our focus will continue to expand into high-risk sectors to protect honest businesses and ensure everyone pays their share.”
The department said it had had to change its approach to tax debt.
“We recognise that continuing to do the same things won’t significantly reduce debt and write-offs. We’re taking an organisation-wide approach and, based on what our data tells us, ensuring resources are focused on areas that will get the best returns. So our preference is to keep working with people in debt to return them to being compliant taxpayers. We’ll let customers know about the help available, treat people with respect and manage debt in a fair and transparent way.
“We’ll make more use of our tools to support staff doing debt collection work.
“We’ll keep evolving our analytics capabilities and develop new interventions to shift customer behaviour.
“We won’t retreat from making hard decisions to secure overdue payments and liquidations will continue to be our option of last resort.”
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