1 00:00:00,040 --> 00:00:02,800 Speaker 1: Genative training. The Herald's Wellington Business editor is with us. 2 00:00:02,800 --> 00:00:05,520 Speaker 1: Hello Janate. Hi, Ever, how did it get so high? 3 00:00:05,559 --> 00:00:07,560 Speaker 1: Is this a COVID related problem? 4 00:00:07,920 --> 00:00:11,440 Speaker 2: Yeah? Look, definitely. During the COVID period, in Land Revenue 5 00:00:11,480 --> 00:00:16,000 Speaker 2: focused on supporting businesses to access government support to get 6 00:00:16,040 --> 00:00:18,680 Speaker 2: through that period. But now it is it is well 7 00:00:18,720 --> 00:00:25,040 Speaker 2: and truly starting to crack down on businesses. For example, 8 00:00:25,079 --> 00:00:27,720 Speaker 2: the number of audits it did rose by forty two 9 00:00:27,760 --> 00:00:31,080 Speaker 2: percent in the year to June. This helped the department 10 00:00:31,120 --> 00:00:34,480 Speaker 2: collect an extra four billion dollars of tax debt. That's 11 00:00:34,479 --> 00:00:38,120 Speaker 2: the highest amount since twenty eighteen. So the government has 12 00:00:38,159 --> 00:00:41,159 Speaker 2: put more money into Inland revenue. That's somewhere. It is 13 00:00:41,200 --> 00:00:43,520 Speaker 2: spending more money, and it wants to see a return 14 00:00:43,560 --> 00:00:45,559 Speaker 2: on that investment. You know, it wants to see the 15 00:00:45,600 --> 00:00:48,559 Speaker 2: department collect up unpaid taxes. 16 00:00:48,720 --> 00:00:50,880 Speaker 1: Yeah. And how much of this is accelerating at the 17 00:00:50,960 --> 00:00:52,599 Speaker 1: rate that it is because of interest? 18 00:00:55,440 --> 00:00:57,840 Speaker 2: You know, that's a good question and I don't have 19 00:00:58,120 --> 00:01:01,720 Speaker 2: the answer to that. I do, however, earlier today, speak 20 00:01:01,800 --> 00:01:05,319 Speaker 2: to an accountant from Baker Tillly Staples Roadway and he 21 00:01:05,400 --> 00:01:07,560 Speaker 2: ran me through some of the different ways that businesses 22 00:01:07,560 --> 00:01:11,000 Speaker 2: are not complying with their tax obligations. So for example, 23 00:01:11,040 --> 00:01:13,720 Speaker 2: he said, a common thing that was happening was, you know, 24 00:01:14,000 --> 00:01:17,959 Speaker 2: using trusts to divert income. You know, you pay income 25 00:01:18,240 --> 00:01:19,880 Speaker 2: goes into the trust and then you pay it to 26 00:01:19,920 --> 00:01:22,520 Speaker 2: beneficiaries you might be your family members and they have 27 00:01:22,600 --> 00:01:25,759 Speaker 2: lower tax rates or you know. ID was looking at 28 00:01:25,800 --> 00:01:28,959 Speaker 2: businesses that actually make their money in New Zealand, but 29 00:01:29,080 --> 00:01:33,039 Speaker 2: then somehow, you know, divert their their revenue so they 30 00:01:33,040 --> 00:01:36,360 Speaker 2: pay tax in other countries with lower tax rates. So 31 00:01:36,360 --> 00:01:39,319 Speaker 2: that's an issue for example, with the with the tech companies, 32 00:01:40,160 --> 00:01:43,280 Speaker 2: you know, tradees. That's another one. People dealing in property, 33 00:01:43,400 --> 00:01:46,560 Speaker 2: he said that that's catching out a lot of people 34 00:01:46,600 --> 00:01:49,480 Speaker 2: because the property tax rules have changed so much. For example, 35 00:01:49,840 --> 00:01:54,080 Speaker 2: now businesses can't deduct depreciation as an expense on their buildings. 36 00:01:54,520 --> 00:01:58,040 Speaker 2: So you know, there's there's all sorts of ways. Property 37 00:01:58,120 --> 00:02:01,680 Speaker 2: is still about one third of the audits the ID 38 00:02:01,760 --> 00:02:06,120 Speaker 2: is doing is related to property, and about one third 39 00:02:06,560 --> 00:02:09,480 Speaker 2: in relation to technical things, and then the rest things 40 00:02:09,600 --> 00:02:13,560 Speaker 2: like drug trade, you know, like the hidden economy and fraud. 41 00:02:13,960 --> 00:02:17,520 Speaker 2: So it's a pretty pretty broad picture there. 42 00:02:17,639 --> 00:02:19,440 Speaker 1: Yeah, Now, I mean I would imagine that as they 43 00:02:19,440 --> 00:02:21,919 Speaker 1: continue to chase it. We will continue to see business 44 00:02:21,919 --> 00:02:22,880 Speaker 1: liquidations going up. 45 00:02:22,960 --> 00:02:27,800 Speaker 2: Yeah, yes, yes, I mean the number of applications and 46 00:02:27,840 --> 00:02:31,760 Speaker 2: then revenue filed in the past year for liquidations went 47 00:02:31,840 --> 00:02:36,280 Speaker 2: up by forty nine percent from the previous year, so 48 00:02:36,080 --> 00:02:41,040 Speaker 2: that is a big jump. The accountant I spoke to suggested, 49 00:02:41,080 --> 00:02:44,799 Speaker 2: you know, ID is you know, pretty reasonable and good 50 00:02:44,840 --> 00:02:46,840 Speaker 2: to work with you if you if you front foot 51 00:02:46,840 --> 00:02:49,320 Speaker 2: the issue and try to fix it. But he said 52 00:02:49,360 --> 00:02:53,720 Speaker 2: in cases where that isn't the case, it's it's increasingly 53 00:02:54,760 --> 00:02:57,640 Speaker 2: you know, happy to pull the plug and try to 54 00:02:57,800 --> 00:02:59,200 Speaker 2: get get the business liquidated. 55 00:02:59,240 --> 00:03:01,000 Speaker 1: Yeah, but a tough pairing. Hey, thank you very much 56 00:03:01,040 --> 00:03:03,240 Speaker 1: to you. I appreciate it. Genative trainee, the heralds Wellington 57 00:03:03,280 --> 00:03:03,960 Speaker 1: Business Editor. 58 00:03:04,680 --> 00:03:07,840 Speaker 2: For more from Heather Duplessy Allen Drive, listen live to 59 00:03:07,960 --> 00:03:10,960 Speaker 2: News Talks A B from four pm weekdays, or follow 60 00:03:11,000 --> 00:03:12,800 Speaker 2: the podcast on iHeartRadio.