Inland Revenue (IR) promised it would use the $29 million in additional funding it was given in the Budget to target taxpayers who had not met their obligations.
Data shows — so far — it is delivering ahead of its goals in many areas.
It outlines its performance against a number of key indicators.
In terms of revenue and recovered or disallowed expenditure due to IR interventions, it is targeting an extra $63 million in revenue at a minimum for the current tax year, to a total $1.038 billion.
In the September quarter, it reported $397.4 million, well ahead of the target range up to $270m. The year earlier, it recorded $234.7m.
Cash collected from overdue debt activities was also significantly up.
There was $1.213 billion collected in the quarter, near the top of the target range and significantly up on the $914.3m of a year earlier.
Overseas borrowers made voluntary repayments of almost $20m more than a year earlier.
‘Sometimes it’s good to be prompted’
Robyn Walker, a partner at Deloitte, said it seemed IR was making good headway in getting a return from the Budget allocation.
She said the increases from the base year seemed significant — targeting hundreds of millions of dollars more in the next tax year than in the previous one — but IR had lower activity levels in recent years due to its internal upgrade work and then Covid.
“We saw it come through in the Budget and actually from the end of 2023 we saw more information requests starting to come through and it’s working its way through.”
Walker said sometimes it would just be a case of taxpayers not thinking about their obligations.
“Sometimes, it’s good to just be prompted for things. If you look at cash collected from debt activities — a lot of the time, you might have in the back of your mind ‘I should do something about that overdue debt’. But no one is hassling you about it so it doesn’t necessarily get to the top of your list.”
She said IR having staff dedicated to debt collection would make a difference.
“Just ringing people up and reminding them. Basic health and hygiene things can make a real difference in terms of making sure people are prioritising their tax.”
Walker said the data seemed to indicate that IR’s forecasts were “on the conservative side”.
‘A billion dollars of overdue debt collected in three months’
In December, IR said its segment lead for significant enterprises Tony Morris had spoken at a Wellington conference about the September quarter.
“Most people do get things right without IR chasing them. Between July and September, 97% of returns filed were on time and 96% of the tax collected was paid on time,” he said.
“But we also opened almost 2000 audit cases in the first quarter, 55% more than the July to September quarter [in 2023].
“IR has collected more than $1 billion of overdue debt in the three months. Between our audits, and our automated systems, we amended returns to the tune of almost $400 million.”
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