Budget 2024 Allocates $116 Million to Boost Tax Compliance and Reduce Debt

Budget 2024 has allocated $116 million over the next four years to support Inland Revenue in collecting debt and improving compliance in the tax system.

The 2024 Budget has introduced new compliance funding aimed at better equipping Inland Revenue to catch individuals evading their tax obligations, Revenue Minister Simon Watts announced.

“New Zealand’s tax debt had risen to almost $7.4 billion by the end of May, an increase of more than 50 per cent since 2022. That’s billions of dollars that could be invested in delivering better public services to New Zealanders,” said Minister Watts. “This is the debt we have inherited, and as the Minister of Revenue, I have been very clear that addressing this is a priority for the Government, delivering one of our commitments in the National-NZ First coalition agreement.”

Budget 2024 has allocated $116 million over the next four years to support Inland Revenue in collecting debt and improving compliance in the tax system.

For the 2024/2025 financial year, Inland Revenue has confirmed that funding will be targeted at:

The hidden economy and organised crime

Electronic sales suppression tools

GST integrity

Student loan overseas-based borrowers

Increased audit activity

“At a time when we are trying to restore the Government’s books while still providing the services that New Zealanders deserve, it’s essential that we crack down on anyone who is not paying the tax they are required to,” Minister Watts stated.

Projections from Inland Revenue indicate that the increased compliance activity is expected to yield a return to the Crown of eight dollars for every dollar spent.

“The additional compliance funding will be targeted at those evading tax, such as people working in and around the hidden economy, and not the vast majority of New Zealanders who comply with the law,” Mr. Watts added.