The impact that COVID-19 has had on customers - businesses in particular - is reflected in the amount of debt owed to Inland Revenue. Many customers have lost income, particularly during lockdowns, yet still have fixed costs to pay. Customers have faced really tough choices about which bills to pay as a priority, and some have not been able to pay their tax on time.
This has contributed to a 10.5% increase in overall tax debt this year, which was $4.8 billion at 30 June 2022. Most of this debt was in income tax and GST.
As at 30 June 2022, 55,888 customers who received Working for Families were in debt, which is 27% more than in June 2021
Aside from tax debt, overdue student loan debt also increased this year. It grew 17.6% to $2.0 billion at 30 June 2022. This is mostly due to only 24.5% of overseas-based student loan borrowers making their required repayments.
It's important to keep in mind that overdue tax debt grew at a comparable rate to tax revenue. It was 4.6% of tax revenue, compared with 4.5% in 2020-21 and 4.5% in 2018-19. This is a good result, considering how difficult the environment has been.
Read more about how we're managing tax debt.
Tax debt
Helping customers avoid debt or manage it
- $4.8 billion is owed in tax debt as at 30 June 2022, 10.5% higher than last year.
- This year, tax revenue was $100.6 billion.
- Overall tax debt as a percentage of tax revenue was 4.6%.
- As at 30 June 2022, the total amount of debt under active arrangement is $1.04 billion.
- This year, we wrote off $688 million.
- $176 million of this amount was for customers seriously affected by COVID-19.
- Between June 2020 and July 2022, 207,000 customers affected by COVID-19 had use-of-money interest written off.
- As at 30 June 2022, 33,000 customers who were paying off their tax in instalments were not being charged use-of-money interest.
- 7,400 customers have opted to 'carry back' a loss in the 2020 or 2021 tax years from the start of the scheme to May 2022.
- This brings monetary benefits worth $243 million to those customers opting to carry back a loss.
All of the above figures are rounded.