IRD collects $40 million after Kiwis dob in tax evaders

Kiwis have dobbed in suspected tax evaders 23,000 times, allowing IRD to collect $40 million in unpaid taxes.

IRD has received about 23,000 anonymous tips since January 2009 from people suspecting others of evading taxes.

That includes about 7000 tips received through an anonymous online form on IRD's website, plus tips received by email, letter or the agency's call centre.

IRD analytics and insight group manager Raju Budhia said the tips helped staff uncover about 900 cases where taxes had been deliberately unpaid and helped them recover about $41m.

Privacy rules prevented Budhia from discussing identifying details about the individuals or businesses involved but in one case involving GST fraud IRD was able to recover $2.4m, he said.

Another case involving income tax fraud saw IRD recover $3.7m, while a third case involving staff being paid "under the table" found $300,000 in unpaid taxes.

Budhia said those cases were at the "higher end" of offending but showed the importance of people sending through anonymous tips, even if they thought it might be something "minor".

One case that was made public involved a Hawke's Bay kebab shop owner, who evaded almost $200,000 in income tax and GST.

Last year, Ahmet Dindar pleaded guilty to four charges of tax evasion, providing false tax returns and money laundering after IRD received an anonymous tip that he was diverting takings to Turkey in an effort to avoid paying tax.

Budhia said IRD staff did not find any wrongdoing in most of the cases involving anonymous tips but information from the public was highly valued.

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"People want to do the right thing and they want other people to be seen to be doing the right thing and I think that's a really positive message."

IRD did not collate information on which part of the country an anonymous tip came from but Budhia said there probably had been more tips about businesses in Canterbury since the region started its earthquake rebuild.

The $41m recovered due to anonymous tips since 2009 was only the tip of the iceberg when it came to tax evasion in New Zealand though.

It has been estimated that New Zealand loses about $1.3 billion from tax evasion every year.

Those caught purposely avoiding tax payments are liable for the tax they have attempted to evade, as well as a penalty of up to 150 per cent, interest and possible jail time.

Revenue Minister Todd McClay this month announced the number of people caught committing tax fraud had doubled this year, compared to 2013.

IRD found about $10.4m in fraud-related discrepancies this year, compared to $4.5m the year before.

The Government had committed an extra $330 million for tax compliance since 2010 - "and it is paying off", he said.

"We trust taxpayers to do the right thing, and the majority do, but those out to defraud the system should know there is a very high probability of being caught."

IRD had developed new processes and introduced "sophisticated" technology to catch potentially fraudulent claims, McClay said.

 - The Press

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