by The Landlord
Revenue Minister Todd McClay said the IRD was taking a proactive strategy to locate those who tried to avoid paying tax. He said it was showing big dividends.
McClay said the IRD had identified discrepancies, or differences between what taxes should have been paid and what actually was paid, of more than $195 million. Of that, $52.4 million was in the 12 months to June this year.
IRD looked at property developers speculating in the residential market, particularly in Auckland and Queenstown. They visited 2500 industry and other interest groups to raise awareness of their tax-related responsibilities, and they monitored 26,000 properties and property-related issues.
McClay said: “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.”
New Zealand Property Investors’ Federation executive officer Andrew King said it was good news that the IRD was having success.
"Our members are rental property owners or investors, but many people in New Zealand think we are traders and speculators. The confusion comes from speculators saying they are investors to avoid paying tax on their profits. People then blame investors for not paying their fair share of tax. The IRD are doing a good job to make sure the system works".
He said information from the IRD showed rental property owners paid nearly half a billion dollars in tax on their rental income.
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