Property speculators targeted by IRDRevenue
Revenue Minister Todd McClay says Inland Revenue’s proactive strategy to track down those attempting to avoid paying tax is showing big dividends.
“There are many ways people and companies attempt to avoid paying tax and we are continually increasing our resources to track them down,” says Mr McClay.
“Property speculation is a good example.
“Over the past four years, Inland Revenue has identified discrepancies – that is the difference between what taxes should have been paid, and what tax actually was paid – of more than $195 million. And $52.4 million of that was in the 12 months to June this year,” says Mr McClay.
IRD looked at property developers speculating in the residential market, particularly in Auckland and Queenstown. They visited 2,500 industry and other interest groups to raise awareness of their tax-related responsibilities, and they monitored 26,000 properties and property-related issues.
“Property speculation is just one example of a sector where the pursuit of undeclared or under-declared income can pay off.
“We take tax avoidance seriously. We spent $172 million on enforcement and compliance through tax auditing in 2012/13 for a return of $1.2 billion. That is a return on investment of $7.47:$1.
“For 2013/14, we spent $165 million for a return of $1.24 billion resulting in a return of investment of $8 for every dollar spent. We are getting results,” says Mr McClay.”