The Inland Revenue Department (IRD) is to receive an additional NZD132m in government funding over five years to increase its tax compliance drive. Some of this is for investing in compliance enforcement, while some will cover tax that must be written off.
This funding is intended to be a follow-up to the success of the IRD’s work on unfiled returns, which looks at cutting down the numbers of outstanding tax returns and targets non-compliance by higher-value taxpayers. This is done against a background of increasing global awareness of the need for governments to cooperate to increase levels of tax compliance.
Governments worldwide are developing more sophisticated methods of quantifying the amount of tax lost through avoidance and evasion. They are increasing the use of techniques such as use of third party information to trace potential taxpayers who have not filed returns or have understated income.
