Robyn Walker: Deloitte Tax Partner on Inland Revenue gaining $600 million from tax audits

An increase in crackdowns has paid dividends for Inland Revenue.  

It collected $600 million in extra taxes from 3,600 audits between July and December last year – 50% more audits than the same time period in 2023.  

Half of the money came from fewer than 10 audits.  

Deloitte Tax Partner Robyn Walker told Mike Hosking it shows the investment at the last budget was worth it, New Zealand getting $11 for every dollar invested.  

She says because of a previous slowdown in audits there's probably a lot of fruit to pick. 

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Episode Transcript

Speaker 1 (00:00):
Now Idea is having a very successful time of it.
They're cracking down on people who own money and finding
quite a lot of it. And the six months to December,
thirty six hundred audits were opened. That's a fifty percent
increase on the year prior. As a result, they've collected
an extra six one hundred million dollars. To Lloyd Tax partner,
Robin Walker's back with us, Robin Morning, Good morning. I
was surprised that the numbers yesterday won the audits and

(00:21):
be the amount of money they found. Will you, I mean,
is this something? Why haven't they been doing this all along?

Speaker 2 (00:26):
Well, that's a very good question. So there was a
period when a lenner of new was introducing its new
computer system, which was basically immediately followed by COVID, where
their attention was diverted elsewhere. And so this is really
a return to the days of old where we've got
investigators out there, you know, shaking people down trying to

(00:46):
find all of that unpaid tax.

Speaker 1 (00:49):
Is this avoidance or evasion? I mean, are these people
going I didn't realize I'm sorry versus oh yeah, you
got me.

Speaker 2 (00:56):
Oh. It can be a whole mix of things. So
a lot of comply answers can be innocent, So it's
just a misunderstanding about how the tax rules. Taxpayers and
iod can have different views on things. Some of it
will be deliberate, and that's where you'll see Inland Revenue
targeting particular sectors and focusing on areas to try to

(01:16):
find those non compliant taxpayers.

Speaker 1 (01:18):
Do they take the money if it means the business
goes to the wall? We seeing businesses liquid.

Speaker 2 (01:25):
Certainly Inland revenues increased reported that they've increased the number
of liquidations that they've undertaken. And the other interesting thing
which they've noted in their press release is that they
are looking at what assets does the taxpayer have available
to them and if they've got money that or assets
that they could be selling or refinancing to pay their

(01:45):
tax bill. They're saying, sell those assets because you owe
the taxpayer and the.

Speaker 1 (01:52):
Nationally as an expert, they can legally do that. If
entity A owes money, but I've got entity B and C,
they can force me to do something with B and
C to settle A.

Speaker 2 (02:04):
Well, they can force they can do things to taxpayer
A to encourage them to find the money to resolve that,
so they can have a more heavy handed approach to
collecting there, or they can be more lenient and enter
into installment arrangements and make life a bit easier for people.

(02:25):
So there's a range, and generally the more cooperative a
taxpayer is, the nicer I ad will be in return.

Speaker 1 (02:31):
Okay, is this low hanging fruit, the six hundred million
and they're going to be working hard from here? Or
is this just riches galore?

Speaker 2 (02:39):
I think because we've had this period of not seeing
a lot of audits, there's sort of a lot of
fruit to be picked at the moment, but there's you know,
you'll reach the point of diminishing returns. So at the
moment there's there's plenty of you know, cushions to look
behind to find things, but you know at some point

(02:59):
that won't necess serially be the case. I mean, I've
done a little back of the envelope calculation, which may
or may not be accurate. That's six hundred million, I
think looks to be about eleven dollars for every dollar
that's invested, so very good return on their investment. Historically,
in land revenue clicks around about eight dollars for every

(03:20):
dollar that they spend on investigation activity, so you know
it's well worth the efforts. So long as you know,
like I said, you get to the point of diminishing returns.

Speaker 1 (03:31):
Great stuff, Robin, appreciate your insight, Robin Walker, who's with
the Deloitte Deloittes tax partner. I note there were seven
hundred and seventy unannounced visits to vape and boo shops,
which doesn't surprise me. I'd go looking personally at the
bubble tea. You've seen how many bubble tea places there
are around that count be lived for more from the
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