Keith McLaughlin: Centrix Group Managing Director on the IRD's planned crackdown on stubborn debtors

The Inland Revenue Department has launched some new steps in bringing down tax debt - with one scheme linked to a key credit agency.

Following a successful pilot, the IRD will report more recalcitrant tax debtors to credit reporting agency Centrix.

Centrix Group Managing Director Keith McLaughlin says this scheme is designed to bring down company debt at this stage, not personal debt.

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Episode Transcript

Speaker 1 (00:09):
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Speaker 2 (00:16):
If you still owe the IID money, you might want
to get on top of it because they're going to
start reporting people who don't pay their taxes to Centrics,
which means it's going to affect your credit rating. Keith
McLaughlin is the managing director of Centrics and with US high. Keith,
this is a great move, isn't it?

Speaker 3 (00:33):
Well, it is, but I think I should point out
that this does relate to company debt, not to personal debt,
so at the stage the only parties affected are companies
in New Zealand.

Speaker 2 (00:43):
But the impact of it is that it's more transparent
and more honest, isn't it Because if a company is
owing money to i ID and then turns up on
your books, others will not lend to it as well.

Speaker 3 (00:53):
Well, that's correct. Historically, if the text debts aren't disiplated
on a credit report, then somebody does a credit report
assumes that everything is fine, totally oblivious to the fact
that there may be a significant debt o into the
text department and could result in them advancing credit or
providing goods and services and really being caught out.

Speaker 2 (01:15):
Keith, Australia already does this, why doesn't our ID do it?

Speaker 3 (01:19):
Well, we started the process back in twenty seventeen and
at that stage they did introduce the ability to load
tax debt back in twenty seventeen, but it was a
very cumbersome method and I think Australia really shortcut it.
They dropped the process, made a lot easier to load
their debts with a credit bureau. And I think having

(01:41):
had another look at what they do in Australia, I
think the New Zealand decided that there is room to
improve the system here in New Zealand. And is it
improved well, very much so. I mean we're now really
starting to see the tax department moving a lot quicker.
The tax leader is coming through to the bureau and
it will make a significant change to business credit going forward,

(02:04):
because that transparency will change the way that credit is
provided to business Newelling.

Speaker 2 (02:09):
So these guys did a trial earlier this month on
this right and they had thirty different outfits and they
told those outfits, if you don't pay your taxes, you're
going to going to get reported to centrics and they
said it was successful, but they didn't say how many
of them actually paid the taxes. Do you know the
outcome of the trial?

Speaker 3 (02:23):
No, I don't. At the stage, we effectively load it
and they're and part of the delay was setting up
systems so that they can update us, because no point
in just loading information onto the bureau and they're not
maintaining or updating that data. So there's the process that
we're going through at the moment. As part of that
pilot is to make sure that it's not just dropped
into the bureau and forgotten about. I mean, it's an

(02:43):
obligation to keep it accurate, to keep it current, and
that's the process we're working through at the moment. So, yes,
they have started loading it, but we are still working
through at the moment. There's still a reasonable menu limput
and we're trying to get that as electronic as we can,
so there's automatic updates come through from the text department
into the Centric database.

Speaker 2 (03:02):
Yeah, brilliant. Hey, thank you very much, Keith, appreciate your time.
As always, Keep Aglocklin, Managing Director of Centrics.

Speaker 1 (03:07):
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