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Inland Revenue is "five years late" to tackle the mammoth issue of the country's estimated billion-dollar "hidden economy", a tax expert says. A Victoria University and IRD study released in April estimated that New Zealand is missing out on about $800m in its annual tax … View moreInland Revenue is "five years late" to tackle the mammoth issue of the country's estimated billion-dollar "hidden economy", a tax expert says. A Victoria University and IRD study released in April estimated that New Zealand is missing out on about $800m in its annual tax take. Chartered Accountants Australia and New Zealand believe this is likely to be in excess of $1b each year. The tax department yesterday announced it had carried out a series of unannounced raids on hospitality businesses in the Queenstown and Central Otago region - new measures in a bid to curb unreported cash sales and staff being paid cash under the table. Using court-issued search warrants, IRD raided three hospitality businesses and made unannounced visits to six others. It seized wage records, computers and other business records, along with information on employer-provided accommodation, working for Families Tax credits and payroll matters. It found that businesses were paying staff in cash without PAYE being deducted, and documents revealed some were making cash deposits into private bank accounts without being returned for GST or income tax. IRD says it would continue to use the strategy to catch operators failing to comply with tax law, but Terry Baucher, founder of Baucher Consulting, says IRD has in recent years took its "eye off the ball" as it became "too focused" on its business transformation programme rather than growing hidden economy. "The business transformation programme should have happened five years ago, at the very latest," Baucher told the Herald. "We don't know the size of the hidden economy and that's the point coming out ... my view is that this sector is bigger than people realise, much bigger. "Inland Revenue is now returning its focus on to this matter. With its new upgraded systems I think it has got better data matching abilities - they are now enhanced, so it can now go about this with a renewed figure." Baucher said New Zealand's GST system enabled it to pick up on under-the-table activity. "Because our GST is so comprehensive, I believe that policymakers, that means Inland Revenue, have been a little complacent about the extent of the cash economy." IRD estimates that approximately $256m worth of income was not reported in 2018 and 2019 - about $108.8m identified in 2019, and $148m in the 2018 year. According to it annual report, for every $1 spent on efforts to crack down on the hidden economy, IRD received about $6 in return revenue last year. "They targeted getting $4.59 [back] so they were 20 per cent above what they were expecting," said Baucher said. IRD research has found that the proportion of people participating in cash jobs was beginning to decline. In 2011, 34 per cent of people said they participated in cash jobs. This is now down to 27 per cent, while just 16 per cent of people said they were now likely to ask for a cash price discount compared with 27 per cent previously. About 49 per cent of people said cash jobs were acceptable, down from 72 per cent from 2011. Baucher said IRD's unannounced visits and raids to its assessed "high-risk businesses" would have a positive impact on tackling New Zealand's hidden economy. He said New Zealand could also follow Sweden by implementing a surcharge or similar for cash payments. Inland Revenue customer segment leader for micro, Richard Philp, said there were 90 tax evasion prosecution cases before the court, and that IRD was making progress on the issue. "The construction industry and the hospitality industry are two industries that typically represent a higher level of cash transactions, and particularly with the hospitality industry, there are small amounts one-by-one but collectively they can build up to be substantial amounts of cash suppressed and not declared annual GST returns," Philp said. The IRD first began focusing on a crackdown on cash payments in the hospitality industry about three years ago. Unannounced visits to businesses, however, are a new strategy the tax department is undertaking to clawback tax owed. "Cash jobs undercut legitimate operators so our goal is not to prosecute everyone but to have enough examples and representation around our enforcement work that helps guide people to do the right thing."
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Firefighters are still tackling flare ups days after the SkyCity Convention Centre fire erupted. T…
GRAPHIC WARNING: Some readers may find the content of this story distressing A man who subjected th…
“Parkable really has been a game-changer for me.” - Jon Kowski
By renting his single parking spot on Parkable, Jon makes an extra $2,500 each year. That means less stress about finances and a better lifestyle.
How much could you earn with Parkable? Find out by clicking through!
If you … View more“Parkable really has been a game-changer for me.” - Jon Kowski
By renting his single parking spot on Parkable, Jon makes an extra $2,500 each year. That means less stress about finances and a better lifestyle.
How much could you earn with Parkable? Find out by clicking through!
If you list your space by the 30th of November 2019, you'll go in the draw to win a $50 gift voucher.
We're on the hunt for a full-time Member Experience Specialist to take ownership over Neighbourly's helpdesk and content moderating. Find out more about the role here.
Central city roads have partially reopened around SkyCity's New Zealand International Convention Cen…
Opinion: I like the area I live in but … it can have a bit of a "ghetto" reputation. If anyone who d…
JAPANESE BEEF STEAKS WITH SLAW AND MISO Serves 4 Ready in 30 minutes Recipe courtesy of My Food Ba…
Hello, community.
A big coach with slight visible defect on the pillow is available for free.
Pick up from Blockhouse Bay.
Pm me beforehand 0224366095 Olga
GRAPHIC IMAGE THAT SOME MAY FIND DISTRESSING BELOW Auckland Harbour's beloved leopard seal Owha, ha…
Our new website is now live and ready for visitors. Click below to see it for yourself.
OPINION: In just under five years, the idea of a light rail line from downtown Auckland to the airpo…
"Coffee with a Cop" tomorrow 29 October at 869 New North Road, Mt Albert drop in have a chat with Constable Dyan Tahiwi.
Coffee with a Cop brings police officers and the community members they serve together–over coffee–to discuss issues and learn more about each other.
Aucklanders, do you want to help your Museum become even better?
We’re seeking feedback from the community on our Draft Annual Plan for 2020/2021. We want to know what’s important to you when it comes to your Museum.
If you can spare a few minutes, please visit the link below to rank our … View moreAucklanders, do you want to help your Museum become even better?
We’re seeking feedback from the community on our Draft Annual Plan for 2020/2021. We want to know what’s important to you when it comes to your Museum.
If you can spare a few minutes, please visit the link below to rank our priorities and have your say. Submissions close 5pm 25 November 2019.
An entire Wesley Intermediate School Uniform for sale.
All bought new, mid year, and used for one term before transferring schools. (Apart from one Uniform Polo Shirt)
Willing to sell separately, or take the lot for $80
1 Uniform Sweatshirt Size M ....................... $20
1 Winter Uniform Long … View moreAn entire Wesley Intermediate School Uniform for sale.
All bought new, mid year, and used for one term before transferring schools. (Apart from one Uniform Polo Shirt)
Willing to sell separately, or take the lot for $80
1 Uniform Sweatshirt Size M ....................... $20
1 Winter Uniform Long Pants Size L ............$15
2 Uniform Polo Shirts both Size L ................$10 each
2 Uniform Shorts both Size XL .....................$10 each
2 PE Uniform T Shirts both Size XL ..............$10 each
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