New Zealand Revises Revenue Higher After Tax Dept Blunder

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

21 March 2008

The discovery of a serious error made by New Zealand's Inland Revenue department in January’s Crown Accounts will not alter the government’s commitment to responsible fiscal management in a time of considerable economic uncertainty, Finance Minister Michael Cullen has announced.

The Inland Revenue announced that Crown Accounts released earlier this month incorrectly reported a headline operating deficit. An error meant that January tax revenue was under-reported by approximately NZD600 million (USD476 million).

“Inland Revenue’s error was serious and unacceptable,” commented Dr Cullen. “The news of a tax shortfall in January was a surprise to the government, but also caused unnecessary confusion in the business community."

“While it appears the error was a human one, Inland Revenue and the Treasury are investigating the cause of this mistake and will report back to Revenue Minister Peter Dunne and myself," he added

Despite the upward revision in the Crown Accounts, Cullen claimed that the mistake means very little for the government’s overall focus on "responsible economic management".

“The decisions we are making around May’s Budget will focus on responsible fiscal management and steps to take our economy forward towards even greater prosperity. Our eight years of prudent fiscal policy means we can weather the current economic situation with greater ease than would have otherwise been the case," he argued.

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