Extra Funding To Support More Compliance Work

Inland Revenue (IR) has outlined how it will use increased funding in this year's budget to boost collection activities and invest more in tax compliance.
Additional funding
The Commissioner of Inland Revenue, Peter Mersi, says increased funding in this year's budget means the great majority of New Zealand taxpayers who meet their obligations can continue to be confident IR will find those who aren't.
'Budget 2025 also provides new additional permanent funding of $35 million per year for Inland Revenue to invest more in tax compliance and collection activities.
'Along with the $29 million per year that was allocated in Budget 24, this is a significant funding boost and is recognition of what we do and the excellent results we've had so far this year,' Peter Mersi says.
'In addition, the Government has agreed to continue $26.5m of funding that was set to end this year, and importantly, made it on-going. This means we can continue with a range of compliance and debt work, including around the Small Business Cashflow Scheme loans which are in default.'
Peter Mersi says 'just like last year, IR is expected to return an additional $4 for every dollar invested in year 1, and $8 dollars from year 2. This is in addition to increasing the return from last year's compliance funding boost by $8 from 1 July.
'While we do that, IR also must maintain its base level of tax collection and debt reduction."
Plans for the funding
Inland Revenue will use the additional funding to focus on new activities around things like:
• further increasing audits and debt collection in areas of high risk and/or value
• investigations into specific sectors such as property, organised crime, the hidden economy and trusts
• improved use of data and intelligence to more quickly identify and target discrepancies and pursue debt
• shifting from a manual to an automated process to collect data from third parties, such as banks.
• investigating more targeted compliance activity measures.
Inland Revenue will take on additional staff to deliver this work, as well as using our systems and technology in more effective ways.
Third quarter result highlights
• This year to 31 March 2025, we have assessed additional tax of $880.8 million from audit activity
• The total number of IR-initiated liquidations this quarter (134) is 67.5% higher than the same quarter last year.
• Our debt collection activities continue to result in increased cash collection, with $2,985 million collected in the year to date compared to $2,688 million for the same period last year.
• The number of prosecutions initiated during this quarter has more than doubled.
• Overseas-based student loan repayments increased by 43.9% compared to the same period last year.
• Child support debt (as at 31 March 2025) is $930 million, 10% lower when compared to the same period last year.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

RNZ News

10 hours ago

• RNZ News

Climate Minister says gas shortage will lower greenhouse emissions

Kapuni gas plant. Photo: RNZ / Robin Martin Climate Change Minister Simon Watts says the gas shortage will lower greenhouse gas emissions, but at a cost for businesses that can't switch to electricity. Supply from existing gas fields has plunged since the government published its Emissions Reduction Plan in December 2024. Watts was asked in a scrutiny hearing in front of the environment committee of MPs why the government's climate plan had put such heavy emphasis on capturing and storing carbon dioxide underground at Kapuni gas field, when the project was untested and its prospects were now looking dubious. Watts blamed the gas shortage - but said the shortage itself would lower carbon dioxide emissions. He said, compared with when the plan was written, "New Zealand has less gas than it thought". "Less gas that's available by virtue is less emissions, so in some ways there is an acceleration of the emissions reduction because we simply don't have that gas available," he said. "We are at critical levels in the context of low levels of gas. Some may say with a purely climate hat on, well that's good, there are no emissions and therefore they can't use it (gas)," Watts said. "But the reality is, in a manufacturing and industrial sense there are a number of businesses who either have an inability to transition to other sources ... or doing so is a significant fiscal cost and/or time horizon." Watts said the government was looking at ways to help those companies. "The good thing is, in the current environment there is an economic [and] commercial case to transition off gas because electricity is cheaper, and therefore the commercial imperative is driving that transition." "I'll take market intervention over government regulation any day." Watts said the government's assumptions regarding future gas use and the prospects of carbon capture at Kapuni would need to be reassessed and the results would published later this year. Carbon capture and storage (CCS) condenses carbon dioxide and stores it underground in reservoirs. Overseas, some high profile projects have been controversial because taxpayer funds for climate action were being paid to some of the planet's biggest emitters, fossil fuel companies, to capture and store just a tiny fraction of their pollution underground. Fully a third of the carbon savings needed to meet the government's legal obligations to cut emissions from 2025-2030 was supposed to come from carbon dioxide being stashed permanently underground at Taranaki's Kapuni gas field. But in May, Kapuni's owner Todd Energy told RNZ the project wasn't viable unless it received some kind of extra incentive or subsidy from the government. The scheme would earn carbon credits for every tonne of emissions stored, but Todd said the market price of carbon was too low to justify the investment. Simon Watts. Photo: RNZ / Samuel Rillstone At the scrutiny hearing, Watts was grilled by opposition MPs on whether Todd Energy had asked for direct subsidies from the government. Watts said he hadn't seen such a request, but Labour MP Deborah Russell presented him with an answer to a written question in Parliament, confirming Todd had asked for subsidies. Watts didn't directly answer Russell when she asked what the government's reply had been. He said in regards to support for industries "there's a number of aspects that remain under active consideration". Watts said the government was still committed to passing regulations allowing carbon capture and storage as "one tool in the toolbox" for lowering emissions. RNZ asked Todd to clarify what it had asked for. It said it had not asked the government for a direct subsidy for carbon capture and storage at Kapuni. But the company confirmed it wanted either co-investment, government underwriting or shared liability with the taxpayer for any future carbon leaks from the project. Todd has previously argued the government should treat carbon capture and storage facilities as infrastructure. "In our 2024 submission to MBIE (Ministry for Business Innovation and Employment) on the CCUS consultation, we did signal that government support - particularly in the form of risk-sharing or enabling mechanisms - would be essential for CCS to proceed in New Zealand," it said. "Particularly, we noted that New Zealand's declining gas reserves make the economics of CCS challenging and that 'for CCS to be effective, the government should consider sharing project risks and responsibilities. "It could be liability for leakage, particularly if the intent is to store third party CO2 in time. Due to challenging economics there is also financing risk that co-investment or a government underwrite could help to de-risk," said the company. Todd Energy had previously estimated the Kapuni field would have room for storing carbon dioxide produced by other companies, as well as its own. Earlier in the hearing, Watts was asked by National MP Grant McCallum about the risk of "emissions leakage" if New Zealand started lowering its methane emissions from farming. Emissions leakage refers to the risk of production moving overseas to get away from emissions pricing in its country of origin. Watts defended the necessity of meeting New Zealand's climate targets and international obligations. "You hear some on some corners saying, we're very small and insignificant," he said. "Every country, big or small, has a role to play in terms of reducing emissions and New Zealand is part of the Paris Agreement for that purpose. "In terms of adding up all the small and insignificant countries, it adds up to 40 per cent of global emissions," Watts said. "If we pull out, what signal does that send? There are three countries that are not part of the Paris Agreement, the USA and a number of other countries that most people probably have probably never heard of." [Those countries are Iran, Libya and Yemen . "Russia, China, India, they're all part of the Paris Agreement, and all the other countries we would look to - the only one is the US. "In regards to the implications on international trade, ... New Zealand has a reputation as a primary sector exporter of red meat, dairy and other products," he said. "Why would we put that at risk?"

RNZ News

12 hours ago

• RNZ News

KiwiSaver hardship withdrawals applications doubled

One of the organisations vetting KiwiSaver hardship withdrawals has said applications to dip into the retirement fund have more than doubled in the past two years. This comes as some fund managers have expressed concern about social media "how to guides" advising people to go into more debt or fudge their financials so they can crack open the retirement piggy bank early. Inland revenue figures show that in April 2025 hardship withdrawals were up $300 million on the year before. Public Trusts acts as a supervisor for various KiwiSaver schemes and decides which hardship withdrawals are signed off. General Manager of Corporate Trustee Services David Callanan spoke to Lisa Owen. To embed this content on your own webpage, cut and paste the following: See terms of use.

Scoop

15 hours ago

• Scoop

Flood Of Interest To Invest In New Zealand

Minister for Economic Growth Hon Erica Stanford Minister of Immigration The Government is attracting new migrants to bring their capital, experience and skills to New Zealand with a flood of formal interest in the new 'golden' visa. Since only April – less than three months – Immigration New Zealand (INZ) has received 189 applications for the Active Investor Plus visa, significantly more than the 116 applications received over more than two-and-a-half years under previous settings, Economic Growth Minister Nicola Willis says. 'New applications under the scheme represent a potential $845 million of new investment in New Zealand business.' "Attracting investment to New Zealand is crucial to the country's economic growth. It means Kiwi businesses can expand, hire and grow – and that means more opportunities for New Zealanders. 'Investor migrants are clearly attracted to New Zealand's growing reputation as a safe, pro-business, high-potential economy. In a world where countries compete for dollars and talent, it's great to see New Zealand's growth prospects being recognised.' 'New investors don't just bring their dollars to our shores, they also bring skills, knowledge and experience that will drive future economic development. It's a win-win.' Immigration Minister Erica Stanford says the interest shows investors hear the call loud and clear: New Zealand is open for business. 'We welcome your capital, your knowledge, and your contribution to New Zealand's economic growth,' Ms Stanford says. 'We're seeing strong momentum from global investors, particularly across Asia and North America. This reflects our growing reputation as a stable, forward-looking destination for investment and innovation. 'These are smart, flexible and nuanced immigration solutions to help stimulate economic growth.' On April 1 the Government changed the Active Investor Plus visa to a simple two-pronged system: the Growth category and the Balanced category. Other changes included expanding the scope of acceptable investments and removing potential barriers to investment, such as the English language requirement. As at 23 June, 100 applications had been approved in principle, and of those, seven had transferred and invested their funds in New Zealand and had been granted a resident visa. Five of those were invested in the Growth category and two under the Balanced category, totalling a total minimum investment of $45 million. The Growth category for this Visa focuses on higher-risk investments, including managed funds and direct investments in New Zealand businesses. It will require a minimum investment of NZD $5 million for a minimum period of 3 years. The Balance category focuses on mixed investments, with the ability to choose ones that are lower risk. There will be a minimum investment of NZD $10 million over 5 years.