IRD starts unannounced visits to construction sites

The Inland Revenue Department has started unannounced visits to construction sites this month

In April, IRD issued a "last chance warning" to the construction sector over untaxed cash jobs.

"We're not blind to the fact that businesses in the construction sector have struggled with increases in the cost and availability of materials, and labour shortages over the last few years," it said at the time.

"But we also know that while some are struggling just to keep up with the everyday grind, others are actively avoiding their tax obligations."

In a new statement, the department said visits to construction sites began earlier this month as it increases enforcement activity.

"We’ve been actively encouraging businesses in the construction sector to sort their tax affairs through our Tax Toolbox media campaigns," Commissioner of Inland Revenue Peter Mersi said.

"We’ve also started texting those with high debt to encourage them to get in touch about working things out.

"Debt collection and audits are also now getting underway in earnest."

There was also a focus on the taxation of multinationals, both in New Zealand and in other tax jurisdictions.

"For both multinationals and corporate restructures, tax issues are complex and the amounts at risk are large.

"Inland Revenue is therefore increasing audits of multinationals and corporate restructures."

In Budget 2024, $29 million was allocated for compliance, which IRD is using to target those people who - due to challenging circumstances or a deliberate decision - have not met their tax obligations, the department said.

One move the IRD is making is increasing compliance with those who have a student loan and are based overseas with property in New Zealand.

"Most customers with student loan debt in default are based overseas. Inland Revenue will be increasing compliance in this area, including a new campaign where we will be contacting those overseas based student loan borrowers who own property in New Zealand.

"If you’ve got an investment property here, you should be meeting your loan repayment obligations."

The IRD also said it was aware of "significant underreporting" from some involved in making cryptoasset transactions.

Minister Simon Watts said new compliance funding means Inland Revenue is better equipped to catch individuals who are evading their tax obligations.

"New Zealand’s tax debt had risen to almost $7.4 billion by the end of May, an increase of more than 50 per cent since 2022. That’s billions of dollars that could be invested in delivering better public services to New Zealanders.

"This is the debt we have inherited, and as the Minister of Revenue, I have been very clear that addressing this is a priority for the Government, delivering one of our commitments in the National-NZ First coalition agreement.

"Budget 2024 allocated $116 million over the next four years to support Inland Revenue in collecting debt and improving compliance in the tax system.

"At a time where we are trying to restore the Government’s books while still providing the services that New Zealanders deserve, it’s essential that we crack down on anyone who is not paying the tax they are required to."

Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.