Financial schedules - Crown as administered by Inland Revenue

Schedule of revenue - Crown as administered by Inland Revenue

for the year ended 30 June 2008
2006-07 Actual $000		2007-08 Actual $000	2007-08 Main Estimates $000	2007-08 Supp Estimates $000
	Direct taxation
	Income tax
	Individuals
20,770,875	Source deductions	23,108,940	21,950,000	22,438,000
4,440,162	Other persons	5,071,276	4,553,000	4,986,000
(1,080,494)	Other person refunds	(1,470,176)	(1,102,000)	(1,290,000)
467,712	Fringe benefit tax	522,220	474,000	521,000
24,598,255	Sub-total individuals	27,232,260	25,875,000	26,655,000
	Company tax
9,918,255	Gross company tax - other	9,345,230	9,064,000	9,099,000
(295,885)	Company tax refunds	(241,726)	(255,000)	(310,000)
9,622,370	Sub-total company tax	9,103,504	8,809,000	8,789,000
	Withholding tax
2,226,929	Resident withholding tax on interest income	2,698,766	2,340,000	2,596,000
88,776	Resident withholding tax on dividend income	69,496	92,000	63,000
149,191	Foreign-source dividend withholding payments	71,121	102,000	122,000
1,189,138	Non-resident withholding tax on income	1,505,633	1,005,000	1,653,000
601,857	Specified superannuation contribution withholding tax	659,879	669,000	645,000
4,255,891	Sub-total withholding tax	5,004,895	4,208,000	5,079,000
38,476,516	Total income tax	41,340,659	38,892,000	40,523,000
	Other direct taxation
2,008	Estate and gift duties	2,620	2,000	3,000
2,008	Sub-total other direct taxation	2,620	2,000	3,000
38,478,524	Total direct taxation	41,343,279	38,894,000	40,526,000

Schedule of revenue - Crown as administered by Inland Revenue (continued)

2006-07 Actual $000		2007-08 Actual $000	2007-08 Main Estimates $000	2007-08 Supp Estimates $000
	Indirect taxation
	Goods and services tax
18,039,635	Gross goods and services tax - Inland Revenue	19,003,976	18,626,000	19,143,000
(8,325,179)	Goods and services tax refunds	(9,516,358)	(8,231,000)	(8,841,000)
9,714,456	Sub-total goods and services tax	9,487,618	10,395,000	10,302,000
	Other indirect taxation
6,953	Stamp and cheque duties	6,313	7,000	7,000
85,158	Approved issuer levy	85,220	72,000	81,000
271,224	Gaming duties	301,889	256,000	285,000
14,982	Other indirect taxation	30,530	-	16,000
378,317	Sub-total other indirect taxation	423,952	335,000	389,000
10,092,773	Total indirect taxation	9,911,570	10,730,000	10,691,000
	Other revenue
241,988	Compulsory fees, fines, penalties and levies - child support	307,714	243,000	268,000
405,526	Interest on impaired student loans	361,219	353,660	364,000
-	Interest on impaired tax receivables	-	^* 249,240	-
647,514	Total other revenue	668,933	845,900	632,000
49,218,811	Total operating revenue	51,923,782	50,469,900	51,849,000

The accompanying accounting policies and notes form part of these financial schedules.

For full understanding of the Crown's financial position and the results of its operations for the period, reference should be made to the Financial Statements of the Government of New Zealand for the year ended 30 June 2008.

* Prior to finalisation of the treatment of tax receivables under NZIFRS, an allowance was made in the Main Estimates for interest unwind. This was subsequently not required.

Schedule of expenditure - Crown as administered by Inland Revenue

for the year ended 30 June 2008
2006-07 Actual $000		2007-08 Actual $000	2007-08 Main Estimates $000	2007-08 Supp Estimates $000
	Benefits and other unrequited expenses
1,689,451	Family tax credit	1,880,113	1,950,000	2,066,100
9,799	Minimum family tax credit	16,841	14,000	14,800
44,444	Child tax credit	11,242	8,000	10,300
20,654	Parental tax credit	22,716	23,000	22,100
461,106	In-work payment	562,875	560,000	556,700
121,500	Paid parental leave payments	134,767	126,000	136,880
-	Payroll subsidy	962	10,500	820
-	KiwiSaver: Kick-start payment	706,662	276,000	663,000
-	KiwiSaver: Interest	5,052	900	4,800
-	KiwiSaver: Fee subsidy	22,815	8,000	13,000
-	KiwiSaver: Member tax credit	328,731	144,000	248,000
-	KiwiSaver: Employer tax credit	37,469	62,000	101,000
-	Research and development credit	37,000	10,000	37,000
-	Retirement Commissioner	428	-	428
2,346,954	Total benefits and other unrequited expenses	3,767,673	3,192,400	3,874,928
	Borrowing expenses
3,426	Income equalisation interest	401	2,000	3,450
1	Adverse event interest	7	2	10
-	Environmental restoration account interest	745	-	1,000
3,427	Total borrowing expenses	1,153	2,002	4,460
	Bad debts and impairement
1,665,303	Impairment - general tax and family support	245,239	-	150,000
811,055	Bad debt expense	700,749	-	593,000
67,070	Impairment - child support	147,044	-	85,000
151,052	Impairment - student loans	(136,967)	16,743	200,000
2,694,480	Total bad debts and impairment	956,065	16,743	1,028,000
5,044,861	Total expenditure	4,724,891	3,211,145	4,907,388

The accompanying accounting policies and notes form part of these financial schedules.

Schedule of assets - Crown as administered by Inland Revenue

as at 30 June 2008
2006-07 Actual $000		Notes	2007-08 Actual $000	2007-08 Main Estimates $000	2007-08 Supp Estimates $000
	Assets
	Current assets
1,811,302	Cash and cash equivalents		1,276,850	1,650,967	311,302
547,512	Student loans	1	550,048	416,396	593,000
5,935,334	Tax receivable	2	6,795,012	7,018,704	5,437,204
16,794	Receivables child support	3	23,541	84,836	16,794
8,310,942	Total current assets		8,645,451	9,170,903	6,358,300
	Non-current assets
	Receivables and advances - non current
4,881,734	Student loans	1	5,490,252	5,381,442	5,168,074
4,881,734	Total non-current assets		5,490,252	5,381,442	5,168,074
13,192,676	Total assets		14,135,703	14,552,345	11,526,374

The accompanying accounting policies and notes form part of these financial schedules.

Schedule of liabilities - Crown as administered by Inland Revenue

as at 30 June 2008
2006-07 Actual $000		Notes	2007-08 Actual $000	2007-08 Main Estimates $000	2007-08 Supp Estimates $000
	Liabilities
	Current liabilities
	Payables and provisions
4,472	Unclaimed monies		4,472	-	4,472
22,159	Child support		31,084	-	-
3,157,329	Refundables and payables	4	4,420,142	3,480,255	3,179,488
3,183,960	Total payables and provisions		4,455,698	3,480,255	3,183,960
	Reserve schemes
109,875	Reserve schemes	5	119,471	148,678	109,875
109,875	Total value of the reserve schemes		119,471	148,678	109,875
3,293,835	Total liabilities		4,575,169	3,628,933	3,293,835

The accompanying accounting policies and notes form part of these financial schedules.

Schedule of movements between departments - Crown as administered by Inland Revenue

for the year ended 30 June 2008
2006-07 Actual $000		2007-08 Actual $000	2007-08 Main Estimates $000	2007-08 Supp Estimates $000
44,173,950	Net result from operating activities	47,198,891	47,258,755	46,941,612
10,912,239	Opening balance	9,898,841	10,164,276	9,898,841
	Asset transfer between departments
683,153	- Ministry of Social Development	664,001	760,490	703,828
(90,155)	Others	-	-	-
(45,780,346)	New Zealand Debt Management Office	(48,201,199)	(47,260,109)	(49,311,742)
9,898,841	Closing balance	9,560,534	10,923,412	8,232,539

The accompanying accounting policies and notes form part of these financial schedules.

Statement of appropriations - Crown as administered by Inland Revenue

for the year ended 30 June 2008
2006-07 Actual $000		2007-08 Actual $000	2007-08 Main Estimates $000	2007-08 Supp Estimates $000
	Vote: Revenue
	Benefits and other unrequited expenses
182,876	Child support payments	192,945	186,000	190,000
1,689,451	Family tax credit	1,880,113	1,950,000	2,066,100
44,444	Minimum family tax credit	16,841	14,000	14,800
9,799	Child tax credit	11,242	8,000	10,300
20,654	Parental tax credit	22,716	23,000	22,100
461,106	In-work tax credit	562,875	560,000	556,700
121,500	Paid parental leave payments	134,767	126,000	136,880
-	Payroll subsidy	962	10,500	820
-	On payment of employee KiwiSaver contributions to KiwiSaver providers	75,957	-	574,000
-	KiwiSaver: Kick-start payment	706,662	276,000	663,000
-	KiwiSaver: Interest	5,052	900	4,800
-	KiwiSaver: Fee subsidy	22,815	8,000	13,000
-	KiwiSaver: Member tax credit	328,731	144,000	248,000
-	KiwiSaver: Employer tax credit	37,469	62,000	101,000
-	Research and development tax credit	37,000	10,000	37,000
-	Retirement commissioner	380	-	380
2,529,830	Total benefits and other unrequited expenses	4,036,527	3,378,400	4,638,880
	Borrowing expenses
3,426	Income equalisation interest	401	2,000	3,450
1	Adverse event interest	7	2	10
-	Environmental restoration account interest	745	-	1,000
3,427	Total borrowing expenses	1,153	2,002	4,460
	Other expenses to be incurred by the Crown
536,006	General tax and family support bad debt wrtite-offs	700,749	-	713,000
811,055	Impairment of debt relating to general tax and family support	245,239	-	150,000
64,506	Impairment of debt relating to child support	147,044	-	85,000
-	Child support doubtful debt provision	-	2,268	-
151,052	Impairment of debt relating to student loans	(136,967)	16,743	200,000
1,562,619	Total other expenses	956,065	19,011	1,148,000
4,095,876	Total appropriations	4,993,745	3,399,413	5,791,340

The accompanying accounting policies and notes form part of these financial schedules.

Statement of unappropriated expenditure

For the year ended 30 June 2008
	2007-08 Supp Estimates $000	2007-08 Actual $000	Amount in excess of appropriation $000
Other expenses to be incurred by the Crown
Impairment of debt relating to general tax and family support	150,000	245,238	95,238
Impairment of debt relating to child support	85,000	147,044	62,044
Payroll subsidy	820	962	142
KiwiSaver: Kick-start payment	663,000	706,662	43,662
KiwiSaver: Interest	4,800	5,052	252
KiwiSaver: Fee subsidy	13,000	22,815	9,815
KiwiSaver: Member tax credit	248,000	328,731	80,731

The accompanying accounting policies and notes form part of these financial schedules.

KiwiSaver (kick-start payment, interest, fee subsidy, member tax credit) - The higher than forecast up-take in KiwiSaver enrolments since the Supplementary Estimates, combined with variances associated with new accrual-based forecast models, resulted in KiwiSaver appropriations being exceeded.

Payroll subsidy - This payroll subsidy appropriation has been exceeded due to expenditure of $0.264 million relating to the 2006-07 financial year, that was identified after the Supplementary Estimates.

Impairment of debt relating to general tax and family support - Impairment of debt relating to general tax and family support (Working for Families Tax Credits) exceeded appropriation due to a higher than forecast increase in the underlying level of overdue debt. Most new debt comes onto the debt book in the last three months of the financial year (ie, at the April 7 tax agent due date), and this level of growth was not expected at the time the Supplementary Estimates were prepared. Whilst the level of overdue debt has increased by 20% in 2007-08, the actual level of cash collected against this debt also increased at the same rate.

Impairment of debt relating to child support - Impairment of debt relating to child support penalties exceeded appropriation due to higher than forecast increase in the underlying level of overdue debt. These penalties grow year-on-year due to limited write-off provisions under the Child Support Act.This level of growth was not expected at the time the Supplementary Estimates were prepared.

During the year there were two additional breaches of appropriation which were subsequently authorised through the 2007-08 Supplementary Estimates. There were no initial appropriations in the 2007-08 Main Estimates for these. These were as follows:

Retirement Commissioner	$380,000
General tax and family support bad debt write-offs	$123,897,000

Retirement Commissioner - This appropriation was unappropriated up until February 2008.Funding for the Retirement Commission was originally authorised in 2006-07, however, the expenditure did not occur until the beginning of 2007-08. Cabinet approval was obtained in February 2008 to authorise this expenditure in 2007-08 (SDC Min (08) 1/5).This approval was incorporated into the 2007-08 Supplementary Estimates.

General tax and family support bad debt write-offs - The appropriation for general tax and family support bad debt write-offs was unappropriated up until 30 September 2007. This was due to a change in accounting policy, agreed with The Treasury and Audit New Zealand, that reclassified these write-offs as an expense requiring appropriation. Approval was obtained from the Minister of Finance, in November 2007 for an appropriation of $713 million to authorise this technical adjustment for 2007-08 and future years. This approval was incorporated into the 2007-08 Supplementary Estimates.

Schedule of contingent assets - Crown as administered by Inland Revenue

as at 30 June 2008
2006-07 Actual $000		Notes	2007-08 Actual $000	2007-08 Main Estimates $000	2007-08 Supp Estimates $000
-	Legal proceedings and disputes	8	307,127	-	-
-	Total contingent assets		307,127	-	-

When a taxpayer disagrees with a proposed adjustment following an audit by the department, the department issues a notice of proposed adjustment (NOPA) which quantifies the proposed adjustment. The taxpayer is then entitled to dispute this. The department now captures this information.

Schedule of contingent liabilities - Crown as administered by Inland Revenue

as at 30 June 2008
2006-07 Actual $000		2007-08 Actual $000	2007-08 Main Estimates $000	2007-08 Supp Estimates $000
941,382	Legal proceedings and disputes	248,805	750,000	-
40,657	Unclaimed monies	42,481	-	-
982,039	Total quantifiable contingent liabilities	291,286	750,000	-

When a taxpayer disagrees with an assessment issued following the disputes process the taxpayer may challenge that decision by filing proceedings with the Taxation Review Authority or the High Court.

The accompanying accounting policies and notes form part of these financial schedules.

Schedule of trust monies - Crown as administered by Inland Revenue

for the year ended 30 June 2008
2006-07 Actual $000		2007-08 Actual $000	2007-08 Contributions $000	2007-08 Distributions $000
24,109	Child Support	1,313	185,778	(208,574)
153	Child Support - reciprocal agreements	129	9,234	(9,258)
24,262	Total trust monies	1,442	195,012	(217,832)

This trust account was established in accordance with sections 67, 68 and 139 of the Child Support Act 1991. Inland Revenue administers this trust account for amounts collected for non-custodial parents and the subsequent child support payments that are paid to the custodial parents.

The accompanying accounting policies and notes form part of these financial schedules.