NZ's Cash Economy Tax Evasion Drive Progressing Well

by Mary Swire, Tax-News.com, Hong Kong

15 October 2002

New Zealand's Inland Revenue department announced last week that its crackdown on tax evasion within the country's cash economy is progressing well, and signalled its intention to sharpen its focus on large companies and high-net worth individuals over the coming year.

Speaking at an Institute of Chartered Accountants conference held in Christchurch on Friday, Inland Revenue Commissioner, David Butler revealed that the department has collected some $300 million in additional taxes from mass-marketed tax schemes and tax evasion audits over the past year, according to national online news provider, stuff.co.nz.

'Solutions to the cash economy require the community and those businesses who do cash jobs to act differently,' Mr Butler explained, stressing to the assembled delegates that the IRD wants to improve voluntary compliance in the affected industries, and has been actively working towards that end since the tax evasion clampdown was unveiled in May.

With regard to big companies - which according to estimates represent around 2% of New Zealand's taxpayer base, but account for over half of the total tax revenue assessed - Mr Butler explained that:

'During the next calender year, you will see a shift in focus in our approach in managing this important part of the taxpayer base.'

He added: 'We have also been thinking about our approach to high net wealth individuals. Before the end of this year, we will also be in a position to discuss our approach around this key group of taxpayers.'

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