IRD prowls Web to catch cheats
Budget-conscious tax collectors are increasingly turning to popular websites and other e-channels to chase undeclared taxable income, a top accountant says.
The Inland Revenue Depart- ment (IRD) no longer had capacity or interest in ‘‘Russian Roulette’’ tax investigations, Deloitte New Zealand chief executive Thomas Pippos said.
Instead IRD was trying to make the most of a growing body of electronic records, like Trade Me posts, to identify the most likely sources of unstated taxable income. The department had administrative reasons for its actions, Pippos said.
The Government was asking agencies to cut their operating costs, but IRD had extra financial pressure as it introduced a costly new computer system.
‘‘A lot of the resources of the department are focused on the computer systems (replacing them) which means there’s more pressure on the day-to-day compliance.’’
It meant that while IRD had been ‘‘upping the game’’ with better use of people and technology, it was doing what it had to in a ‘‘world of limited resources’’.
Working on social attitudes to tax also seemed to be reaping a return, Pippos said. New Zealand had high voluntary tax compliance by world standards, but IRD was keen to ingrain that tax-paying culture, Pippos said.
IRD this week started an advertising campaign discouraging ‘‘cashies’’ in Auckland’s residential sub contracting market. Pippos said this was part of IRD’s ‘‘evolution’’ from an agency that randomly targeted offenders, to one that looked at high-risk areas for tax offending.
The electronic age was helping the cause. The department probably had fewer investigators than it used to but people were leaving IRD a growing number of digital footprints to follow, Pippos said.
‘‘So, what the department is trying to do is use your information, where it can, to identify behaviour that it is not comfortable with.’’
It was also trying to extend its reach overseas, with a focus on large global companies.