Latest news with #InlandRevenueDepartment
Scoop
14-07-2025
- Business
- Scoop
Former Tax Agent Sentenced For COVID Relief Fraud
Press Release – Inland Revenue Department A former Auckland chartered accountant was sentenced to community detention for fraudulently using the Small Business Cashflow (SBC) loan scheme to get nearly $95,000 for himself. Howard Kane Taylor was sentenced in the Auckland District court on 11 July. He pleaded guilty to the 8 charges just days before his trial was due to start earlier this year. Taylor chose to abuse the scheme and benefit off the taxpayer during the COVID 19 pandemic, a time of significant stress and uncertainty for people and their businesses. In April 2020, the Small Business Cashflow Loan scheme was introduced to help small businesses during the Covid-19 pandemic. It was designed to help those most in need during an unprecedented time of stress. Between 28 May 2020 and 29 June 2020, Taylor made eight SBC loan applications each requesting an amount of $11,800 for various businesses – a total of $94,400. In August 2020 IR began an investigation and found none of the money was paid into the accounts of the companies he had made the applications for. The money went into Taylor's accounts. All of the SBC loans have been repaid to IR. Taylor was a registered Tax Agent with Inland Revenue at the time of the offending but was removed from the list of tax agents by IR in November 2022. He was sentenced to six months community detention and ordered to complete 120 hours of community work. The judge allowed discounts on his sentence for his charity work, repaying the loans and because of his poor health.
Otago Daily Times
10-07-2025
- Business
- Otago Daily Times
FamilyBoost Fizzer
Changes to the early childhood education FamilyBoost package announced this week cannot disguise the fact this National flagship policy has been a fizzer. Prospective voters were told it was expected to help 130,000 low and middle-income families, boosting after-tax pay by up to $75 each week. But only 60,000 families have benefited, and in the first nine months of the scheme only 249 families consistently got the full $75 a week. In the election campaign, FamilyBoost was sold to the public as a rebate system which would be administered by the Inland Revenue Department "with rebates paid directly to parents on a fortnightly basis". Information on childcare expenditure would be provided to IRD directly by childcare providers using existing systems, making the process simple for providers and seamless for parents, according to the campaign document. But the party had not done its homework. As the IRD pointed out in its regulatory impact statement (RIS) on the proposal "administering a childcare tax credit as outlined in pre-election documents requires access to fees information that is linked to individual parents or caregivers, the children in their care, and to their family income for a broad segment of society. Currently no government agency has this fees information." We would be surprised if this could not have been checked before the party flogged its policy to voters. Rather than wait for a direct payments system to be developed, the government was understandably keen to find a way to deliver its promise. It came up with a system whereby eligible families have to pay their fees up front but then can make a claim for part of them. This requires collecting three months of receipts from the early childhood education (ECE) centre and sending them to IRD. This was criticised for being too onerous and not providing the immediate boost to family funds struggling parents might have been hoping for. Finance Minister Nicola Willis has tried to put a brave face on the debacle, but it was only when information about the low uptake came out in April, she said she would be looking at making changes to the scheme. She has seemed keen to blame IRD for over-estimating how many families would qualify for the full rebate (21,000) but IRD made it clear in its RIS the information available was patchy. It said lack of comprehensive ECE fees data from any government agency required it to make assumptions about the severity of the policy problem and the factors causing it, as well as the impact of different options. "This makes it difficult for any government agency to provide advice on how effective existing or new interventions are on the overall affordability of ECE." There will be hopes the changes to the scheme will enable it to benefit far more families, as the proportion of fees which can be claimed has increased from 25% to 40%. The maximum payment is now $120 a week (this would only be available to those paying $300 or more in fees weekly). The amount families can earn yearly to be eligible has increased from $180,000 to $229,000. This has already prompted criticism the scheme will benefit high income earners disproportionately as they already access ECE more because they can afford to. The Office of Early Childhood Education, which was asked for its ideas on the scheme, suggested a rebate of 25% for higher income households and a 50% one for those on lower incomes. It also wanted the rebate cap of $975 a quarter to be per child, rather than per family. Concerns, widely expressed, around the claiming process have not abated. Ms Willis says further work will be done on longer term improvements including ECE providers giving fees information directly to the IRD. The scheme is among the plethora of funding programmes which will be examined in the Early Childhood Education Funding Review announced last month and due to report to the government in about a year. It remains to be seen whether any of its findings will help political parties come up with realistic and comprehensive early childhood funding policies rather than the poorly planned and executed FamilyBoost.
NZ Herald
01-07-2025
- Business
- NZ Herald
New Zealand's largest taxpayers revealed: Banks dominate with $2.5b contribution
This survey identified New Zealand's largest taxpayers, 13 companies who each pay more than $100 million in annual income taxes to the Inland Revenue Department (IRD). These bakers' dozen of corporate behemoths are reported to pay a combined $3.8b cash in income taxes annually. By themselves, this handful of companies account for nearly a quarter of New Zealand's entire $16.9b corporate tax take, which in turn is the Government's third-biggest source of revenue behind personal income tax (PAYE) and sales tax (GST). These 13 companies are the ones with the most to gain if chatter from Wellington earlier in the year that the Government was mulling a cut to the corporate rate ever comes to fruition. A drop of the rate to 25% for instance, just three percentage points, would deliver $250m in boosted annual profits for the big four banks alone. This is because New Zealand's corporate tax base is not only top-heavy, it is also dominated by bankers with Australian accents. The first four places on the list – accounting for more than $2b in annual tax payments – are our big four Australian-owned banks. The remainder of the list is filled out by mostly NZX50 heavy-hitters: a mix of gentailers, construction giants and large technology operators. Most are household names. All will be well-known in the business community, and all report annual revenues of at least $2.8b. A number of other companies reported profits high enough to incur more than $100m in annual income tax expenses – Auckland Airport, Air New Zealand, Fisher & Paykel Healthcare, Xero, SkyCity, Spark and Pacific Aluminium – but tax timing issues or deductions, typically losses carried forward, suppressed the cash amounts they paid to Inland Revenue over the period and therefore they fell out of the top of this list. While headline numbers are of interest, insights can be found comparing these companies' effective tax rates (the proportion of profits reduced by a tax expense) and effective cash rates (the proportion of profits actually paid to the IRD). These should be contrasted with the statutory corporate tax rate of 28%. The big four banks' reported results are closely aligned with our corporate tax rate. Effective tax rates among the big four only vary by a maximum of 0.14 percentage points, while the cash tax rate only differs – generally in favour of the IRD – by at most two percentage points. This sector hasn't always been known as tax paragons, tax adviser Geof Nightingale says. 'If you went back 20 years, you'd find quite different results,' Nightingale says. Tax adviser Geof Nightingale says the Herald study of effective and cash tax rates paid by large corporates shows the banking sector in particularly has come a long way. Two decades ago, the IRD began a titanic campaign against the banking sector, arguing its structuring and chronically low effective and tax cash rates amounted to avoidance. On Christmas Eve, the big four settled, incurring a $2.2b tax bill and their reported results suggest lessons have been learned. 'That [court action] and just also a kind of a jawboning from successive Governments saying to the banks, guys, 'You pull your weight, or we're not going to allow you to operate here' has seen the banks come up to paying the statutory tax rate,' Nightingale says. And overall – with most companies paying close to the statutory rate – it is very positive, he says. 'What your table shows is that the New Zealand corporate tax base is relatively well enforced and complied with. So most of the corporates are there or thereabout at statutory rates. 'Some of them are higher and that's what I would have expected, and the ones that are materially lower, there is a good explanation for it,' Nightingale says. The most jarring figures from the list come from Fletcher Building, whose apparently punishing effective tax rate of 451% from the tail end of the survey period (concluding June 2024) came after delivering a significant and sustained series of setbacks and write-downs. These recent, and ongoing, losses are likely to see Fletchers disappear from this list for some time. Differences between reported tax expenses, and tax actually paid in cash, can be considerable. This is most obviously the case for the New Zealand Superannuation Fund, an $84b Government investment entity intended to front-load the looming cost of providing pension payments for an ageing population. It is a rarity amongst public entities in that it is subject to income tax. Over the two years surveyed, the NZ Super Fund booked just over a billion dollars a year in income tax expenses, but over the period reported received from the IRD – not paying to it – a net $73m. This striking variance is best explained by the NZ Super Fund's head of tax John Payne, but basically boils down to a misalignment of tax years and reporting dates. John Payne, the head of tax at the New Zealand Superannuation Fund. 'It's an issue of timing of when tax payments are made,' Payne says, with the final – and largest – payment for tax occurring in the months after accounts for the year are reported. 'The cashflow statement doesn't show we're paying $1.2 billion, but the 2024 accounts do show a tax provision on the balance sheet of $1.2 billion.' Payne is also the chair of the Corporate Taxpayers Group (CTG), a low-profile peak body for the top end of town whose 47 members include every company identified by the Herald as New Zealand's biggest taxpayers. 'We're a who's who of corporate New Zealand,' he says, figuring that more than half of the entire corporate tax base is represented by his members. Payne is keen to stress that the scale of his group provides some shield from it being dismissed as a lobbyist for lower taxes, and says he was as surprised as anyone that Willis floated a rate cut. 'Certainly, and currently, the group is very aware it's pretty tight fiscal conditions for Government at the moment. Part of our thought leadership mantra is 'what's good for NZ Inc will be good for our members'- ie we're keen on growing the pie and taking out compliance costs,' he says. According to Payne, New Zealand sits towards the top of the OECD in the size of its corporate tax take, helped less by a mid-table rate and more by a cleaner system that largely eschews deductions. While this survey focused on corporate income tax, it's worth noting that there is another small cluster of companies that are the big four's only real rivals when it comes to filling Government coffers. Collectively, the three largest tobacco companies – British American, Philip Morris and Imperial – only record an annual average of $20m in income tax payments over the period, but account for the vast bulk of tobacco excise tax payments to Government that total around $1.5b per year. While the largest operator in tobacco, British American, does not break out excise tax costs in its cost of sales, based on the reporting of its peers it is likely to – by itself – pay more than $800m annually in such taxes, comparable to that provided in income tax by leading contributor ANZ. The country's largest bank, ANZ, appears to also be the largest individual contributor to the IRD. Photo / Alex Burton New Zealand's largest taxpayers, ranked: 1. ANZ Pre-tax profit: $3072m Income tax expense: $860m (27.98% effective tax rate) Cash tax paid: $873m (28.4% effective cash rate) The largest bank in a country where banks rule the business roost, the only real rival to ANZ's position as New Zealand's largest taxpayer will be the odd years when the NZ Super Fund rides a boom. ANZ was also the only company to not specifically break out income tax payments in its cashflow statements. Bank staff directed the Herald to a 'Voluntary Tax Transparency' report published on the website of its Australian parent to find the relevant figures. In the six months since the survey period ended, ANZ has inched forward – reporting a cash net profit increase of 1% – and lucked out with economic hedges that boosted statutory profit by 21%. 2. BNZ Pre-tax profit: $2091m Income tax expense: $583m (27.86%) Cash tax paid: $628m (30.02%) The gap between second and third is wafer-thin, with ASB slightly ahead on pre-tax profits. BNZ secures silver based on a marginally higher level of payments to the IRD. Earlier this year, the BNZ reported steady but modest growth, with home lending up 3.4% and a 4.3% bump in net profits, in the six months to March. 3. ASB Pre-tax profit: $2097m Income tax expense: $590m (28.14%) Cash tax paid: $623m (29.69%) A tight podium tussle sees ASB settle at third with – as is common in the banking sector – its effective tax rate only a fraction of a per cent off the statutory corporate rate. In the six months since the survey period ended, ASB reported a 2% rise in net profits, ensuring it – and the entire sector – will remain the taxman's biggest counter-parties. 4. Westpac Pre-tax profit: $1694m Income tax expense: $475m (28.05%) Cash tax paid: $459m (27.1%) Another member of the Big Four rounds out the top four places on this list. Westpac may be the smallest of its Australian-owned banking contemporaries when it comes to taxable profits, but still reports levels of earnings – and cash paid to the IRD – that are at least twice as large as the non-banking also-rans that make up the best of the rest. Earlier this year, in a six-monthly report following on from the survey period, Westpac reported a 10% rise in net profits and a boost in net interest margin. According to recently-filed accounts for large corporates, Spark is the largest non-bank taxpayer in New Zealand. 5. Spark Pre-tax profit: $833m Income tax expense: $108m (12.91%) Cash tax paid: $190m (22.75%) Spark, the country's largest mobile provider, has had a rough recent six months – with net profits declining 78% – but this comes after it managed to report the lowest effective tax rate, just 13%, among the large taxpayers during the survey period. Nightingale, the tax expert, notes this divergence from the 28% company rate was because of the 2023 booking of capital from the sale of its cell towers to Connexa. As anyone following political debate in New Zealand will know, these gains aren't taxable, but this trick isn't easily repeatable unless Spark finds more family silver to sell. 6. Mainfreight Pre-tax profit: $491m Income tax expense: $174m (35.44%) Cash tax paid: $162m (32.89%) Approaching 50 years since Bruce Plested founded his company with just a single truck, Mainfreight is now New Zealand's largest logistics company and has been an NZX stalwart since listing in 1996. Booking more than $5b in annual revenues, the company is a genuine heavyweight but is having to weather global trade uncertainty triggered by the United States' infatuation with headline-grabbing tariffs. 7. Meridian Energy Pre-tax profit: $360m Income tax expense: $98m (27.22%) Cash tax paid: $157m (43.61%) The leading gentailer on this list – who, with the Big Four banks, make up a majority of New Zealand's top taxpayers – wears a relatively high cash tax rate, largely because of how differently the tax system and accounting reporting standard treat depreciation. 'In the test period, Meridian paid a much higher CTR [Cash Tax Rate] than ETR [Effective Tax Rate],' Nightingale says. 'This arises mainly because the tax depreciation expense is calculated on the historical costs of Meridian's large asset base, while the accounting depreciation expenses is [sic] calculated on the revalued value of the assets, so is a much higher amount – but not deductible for tax purposes.' Roading and construction giant Fulton Hogan has become one of New Zealand's most profitable companies. 8. Fulton Hogan Pre-tax profit: $514m Income tax expense: $149m (29.02%) Cash tax paid: $140m (27.26%) Construction giant Fulton Hogan has grown steadily over the past decade – and enormously since it was founded in the Great Depression to build roads. It is now booking the better part of a billion dollars in profits on more than $6b in annual revenues. Based in Christchurch, with operations across Australasia, Fulton Hogan's accounts cleave closely to the 28% corporate tax rate, with little variation requiring explanation. 9. Ebos Group Pre-tax profit: $408m Income tax expense: $119m (29.10%) Cash tax paid: $134m (32.8%) A homegrown success story, Ebos was founded in Christchurch just over a century ago and gradually refined its operation to focus on healthcare, and in recent times has expanded to include pet care. Now a truly Australasian operation and listed on the ASX, its accounts are reported in Australian dollars and have been converted here into local currency. The company lists New Zealand's statutory rate in its accounts as a basis for reporting tax, but does not break down how much each tax authority – Australia's ATO or New Zealand's IRD – receives, so its position on this list is likely inflated. 10. Mercury Energy Pre-tax profit: $285m Income tax expense: $84m (29.47%) Cash tax paid: $114m (40%) Another gentailer, another apparently high cash tax rate explained by differing treatment of depreciation by tax and accounting regimes. In the six months since the survey period, Mercury reported a turn in fortunes – reporting a $67m loss for the six months to December 2024 – largely explained as a non-cash shift in the value of electricity derivatives. 11. Kiwibank Pre-tax profit: $260m Income tax expense: $71m (29.47%) Cash tax paid: $105m (40.27%) While a relative runt compared to the Big Four, Kiwibank has grown to become a major contributor to Inland Revenue and – depending on how the tricky political and fiscal questions around how to provide it more capital can be answered – has potential to grow further. In the six months since the survey period, to December 2024, Kiwibank grew its lending and deposits by 6%. Fletcher Building was once one of New Zealand's largest taxpayers, but has since run into a series of significant losses. Photo / Getty Images 12. Fletcher Building Pre-tax profit: $17m Income tax expense: $72m (420.59%) Cash tax paid: $101m (605.88%) Fletcher Building is not long for this list. Its fortunes abruptly started to turn during the survey period, and by June 2024 the previous year's $235m profit had flipped into a $227m loss. This provided minuscule net income over the period, dwarfed by its tax bill, which saw its cash tax rate balloon to more than 600%. If there are any positives for Fletchers at this point – and the negatives, including being sued by SkyCity over the Sisyphean International Convention Centre, have continued to pile up – it's that these losses, and those expected to land in coming results, can provide some measure of relief in future through use as carried-forward tax losses. It may be some years before this construction giant needs to trouble Inland Revenue. 13. Contact Energy Pre-tax profit: $258m Income tax expense: $77m (29.71%) Cash tax paid: $101m (39.22%) The last company to squeak over the $100m annual tax bar, Contact is another gentailer and faces a similar plus-sized cash tax rate because of how tax law and accounting practice treats depreciation differently. Matt Nippert is an Auckland-based investigations reporter covering white-collar and transnational crimes and the intersection of politics and business. He has won more than a dozen awards for his journalism – including twice being named Reporter of the Year – and joined the Herald in 2014 after having spent the decade prior reporting from business newspapers and national magazines.
Scoop
20-06-2025
- Business
- Scoop
PM's Intervention To Kill Simon Watts' Ute Tax 2.0 Welcomed By Taxpayers
The Taxpayers' Union is welcoming the Prime Minister's intervention to rule out the Inland Revenue Department's proposal to apply Fringe Benefit Tax (FBT) to all utes worth $80,000 or more and other work vehicles — a plan directed by Climate Change and Revenue Minister Simon Watts. In response to media comment issued by the Prime Minister's Office last night, Taxpayers' Union Executive Director Jordan Williams said: 'Simon Watts was pushing a new Ute Tax, without his Cabinet colleagues or the public even knowing. Had it gone ahead, farmers and tradies would have been slammed with thousands of dollars in additional tax each year – not just once like Labour's Ute Tax, but every year.' 'The documents are crystal clear. IRD was instructed by Minister Watts to proceed with and consult with the tax industry on the implementation of a new FBT regime that would capture work vehicles, regardless of how they're actually used. This was a massive tax hike by stealth.' "As far as we can tell, the Revenue Minister didn't consult with any taxpayer, business, or farming groups, despite work having been done on this for nearly a year. Had he bothered to engage, the unfairness and political risk would have been obvious. That lapse saw the Government facing backlash because it was tax boffins who blew the whistle and it took everyone by surprise. Minister Watts should learn the lesson." 'Within hours of our campaign launch yesterday, the National Party was in damage control. Within six hours, the PM's team overruled Watts and confirmed the policy would not proceed.' The Taxpayers' Union yesterday revealed documents showing that IRD had been working on changes to remove the logbook exemption for work vehicles and impose FBT on the assumed private use of double cab utes. According to IRD's own estimates, the tax grab would have cost farmers, tradies and other ute owners $100 million per year. 'We give credit to the Prime Minister and his office for stepping in quickly and pulling the handbreak.' says Mr Williams. 'This is a clear win for taxpayers and proof that grassroots pressure works. We thank the thousands of Kiwis who used our online tool to email National MPs and demand the Ute Tax 2.0 be scrapped."
Scoop
06-06-2025
- Business
- Scoop
Tax Assessment Period A Prime Time For Scams, Expert Warns
Press Release – Inland Revenue Department Mark Gorrie, Managing Director Norton APAC says,Our latest Q1 2025 Threat Report points out that breached data and AI tools are giving cybercriminals just enough personal information and design sophistication to easily manipulate people. Inland Revenue (IR) has begun issuing income tax assessments to New Zealanders, kicking off the annual cycle of tax refunds and chasing up tax owned. With cybercriminals known to exploit this period, Norton experts are warning that Kiwis will soon be targeted with a range of tax scams, from phishing emails to phone impersonations and fake refund promises. 'New Zealand is one of the most heavily impacted countries by a new wave of AI-driven, hyper-personalised cyber threats. That makes tax time an especially risky period,' says Mark Gorrie, Managing Director Norton APAC. 'Our latest Q1 2025 Threat Report points out that breached data and AI tools are giving cybercriminals just enough personal information and design sophistication to easily manipulate people.' Key tips for protecting yourself: IR never includes refund amounts or login links in emails or texts Watch for suspicious domains (e.g. the real one is Be wary of terms like 'fiscal activity', 'excess payment' or 'Department of Taxes' Never give out personal info over the phone unless you've verified the caller – hang up and call IR back using their official number Use strong passwords, enable two-factor authentication, and secure personal documents Limit what you share online. Scammers can use social media info to guess security questions or build convincing fake messages. Consider enrolling in an identity protection service. These services can monitor your financial and personal data, alert you to unusual activity, and help you recover more quickly if your identity is compromised. Common types of tax scams: Phishing emails impersonating IR, often claiming issues with your refund or tax return Fake IR calls demanding immediate payment for tax debts that don't exist Identity theft, with scammers using your IR number to lodge fraudulent returns Social media scams offering fake tax help or posing as IR reps Emails with fake tax documents that install malware when opened Bogus refund offers used to harvest personal or banking info Scam charities asking for 'deductible' donations Tax payment scams involving prepaid gift cards or unusual repayment methods
