Budget details announced on Thursday include a further Budget allocation of $74 million over five ye...

1. Extra funding for IRD compliance activities
Budget details announced on Thursday include a further Budget allocation of $74 million over five
years for Inland Revenue's investigations activity. This will target property speculation, and for
tackling the hidden economy and aggressive tax planning strategies, Revenue Minister Todd McClay
announced today. For more information see the Minister's media statement.
Hon Todd McClay
Minister of Revenue
22 May 2015
Media statement
Minister welcomes $74 million for tax compliance
Budget 2015 continues the Government's investment in
ensuring fairness in the tax system by pursuing those
attempting to avoid paying tax, Revenue Minister Todd
McClay says.
Budget details announced yesterday include a further Budget allocation of $74 million over five
years for Inland Revenue's investigations activity.
"As announced earlier this week, $29 million of that extra funding will be used to increase property
speculation," says Mr McClay.
He says the remainder of the funding, some $45 million, will be devoted to tackling the hidden
economy (25.4 million) and the tax issues of aggressive tax planning (19.6 million)..
Taken together, the return on investment for this extra funding is expected to yield 8 dollars for
every dollar spent.
"This follows Budget funding provided over several years focused on improving tax compliance and
which is helping to make sure that there are fewer and fewer opportunities for people to avoid
paying their fair share of tax" Mr McClay says
He says that the Budget allocation includes an additional three years of funding to continue work
funded through Budget 2012.
"In 2012, Inland Revenue was provided with an extra $98 million over five years to scale up its
successful tax compliance activities in dealing with the hidden economy, debt collection, and
following up on unfiled returns. It's been a very successful investment. Continuation of this funding
beyond 2016/17 will give additional revenue of $113 million for an annual cost of $20 million.
"The hidden economy work targets certain 'at risk' industries while aggressive tax planning

2. encompasses international issues such as transfer pricing which is a significant issue for New
Zealand and globally.
"When individuals or businesses don't pay their fair share of tax they're cheating those who are
doing the right thing and expecting others to pay their way. There may be a number of reasons why
people fail to engage with the tax system and meet their obligations.
But by participating in the hidden economy, their activity poses real risks to the tax system and
consequently to our economy.
"Taxes help pay for all the government services and functions that we all use and value. If people
don't pay their tax, this has a direct negative effect on the economy. By far most people in New
Zealand do the right thing and pay their tax, but some sectors of society will always try to find a way
to avoid paying which means that others have to pick up the bill" says Mr McClay.
Media Contact: Lesley Hamilton 027 490 1345
http://taxpolicy.ird.govt.nz/news/2015-05-22-extra-funding-ird-compliance-activities