Interesting to note that the latest Auditor General’s report titled “IRD: Managing Tax Debt”, highlights the fact that there are around 202,000 cases of tax debt totalling over $4b! The bad news (as if this wasn’t bad enough) is that $1.82b is considered non-collectable, and about $1.606b (40%) is made up of penalties and interest.
Want to know the cost benefit of collecting debt? For the financial year ending 31 March 2009, for every $1 spent the IRD recovered $65. You would think that they would pump up the numbers collecting, but its okay, because the IRD is going to save about $60m over 5 years by making around 270 staff redundant. We can all sleep at night.
Welcome to Red Alert Stuart. Good first post. Nice and short and to the point.
One would hope that the debt is graded according to the size per case and prioritised, it’d also be interesting to know how old some of this debt is.
I know this’ll probably grate with the general views of this blog but why not outsource some of this work to the private sector to get case numbers down to a manageable size.
Great news that they missed all that tax, it will leave the productive to produce. Less looting is a good thing!
Yes, it’s good to see you make a post Stuart, welcome.
You would think that the Finance Minister and the Revenue Minister would be a little more proactive when it came to getting the IRD to collect money due (or in this case overdue). Especially when they keep bleeping on about the huge deficit – why not help the government books by getting money that it’s entitled too.
It’s amazing that for every $1 spent the IRD received $65 and they’re not making more of an effort.
Gosh the government’s smart – not!
He also appears to be criticising IR for not having the systems or people to actually manage the debt.
One of the unmentioned downsides is that interest and penalties keep mounting up even when IR isn’t actually doing anything active to follow it up, meaning people may be incurring additional debt to the government although they don’t actually know they are.
Finally, and very PS-ishly, any chance you could trim the URL of the link so we don’t get lots of yellow highlighting?
[Done. Thanks for the tip Anita
- admin]
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“You would think that they would pump up the numbers collecting, but its okay, because the IRD is going to save about $60m over 5 years by making around 270 staff redundant.”
So are these staff members working in debt recovery?
Are these staff being trimmed by non-replacement over 5 years ?
good point. no staff in debt collection are being made redundant as far as I am aware, however, my point is that the IRD should be managing resources to best meet the areas of need rather than simply concentrating on head count.
Good stuff. Does Red Alert Twitter? Be good to get updates that way.
[The account is set up. It's on the list of things to do! Thanks for the feedback Belinda - admin]