Investigations (2023)

This category is limited to Te Tari Taake Inland Revenue undertaking investigation, audit and litigation activities.

What we do

We protect the integrity of the tax system through early interventions such as education and integrity reviews. We also use intelligence and risk-based analytics to direct our audit and investigation activities. Where necessary, we take prosecution action where we identify serious wrong-doing.  

Our ‘right from the start’ approach helps customers get it right, as we step in early when they’re making errors, and act if they choose to do the wrong thing. This helps ensure that everyone pays what they need to and receive the right entitlements.

Our systems, processes and capabilities allow us to see more, earlier to identify where things do not look right so we can act promptly. We can detect potential incorrect and fraudulent returns before assessments are confirmed, making it harder for customers to get things wrong either accidentally or deliberately.

How we performed

We did not want to put more pressure on customers during a difficult year. Our systems and tools have been able to do much of the heavy lifting, allowing us to put greater effort to support customers across other priority work. We continued to run one-to-many interventions that promote voluntary compliance and real-time integrity reviews to prevent revenue loss occurring in the first place. 

Our people have continued to take tailored approaches to help different customer groups, such as new businesses, get their tax sorted at the start. We’ve been active in communities to better understand people’s issues, the information they need, and how we convey it.

While we did not meet all our performance measure targets, overall discrepancies have remained relatively steady over time.

We are returning to a more balanced work programme, and it will take time to catch up on work that was deferred or stopped. We focussed on high-risk areas including:

• Property (focusing on brightline transactions, interest limitation and new builds)
• targeted COVID-19 post-payment integrity reviews to ensure customers were eligible to receive the COVID-19 Resurgence Support Payment, COVID-19 Support Payment and Small Business Cashflow Scheme loans and that monies were correctly applied to their business expenditure. 
• the 39% tax rate (including dividend avoidance)
• technical non-compliance (including income allocations omitted from companies or trusts, and loss mismatches)
• fringe benefit tax education and reviews
• hidden economy (with an emphasis on sectors with a high prevalence of cash-based transactions including construction and hospitality, real estate agents claiming high expenses relative to their income or claiming non-deductible private expenses, and businesses operating partially or totally outside the tax system)
• refund integrity and fraud focussed on risks created by customers trying to receive refunds and entitlements they are not eligible for corporate restructuring, and
• tax governance.

Performance measure results

This year, we achieved 1 out of 3 measures for the Investigations category in the Services for Customers multi-category appropriation. This is similar to 2021–22 when we achieved 1 out of 4 measures. 

¹Actual performance measured using a sample of audit cases.

²Actual performance is measured using a sample of the customer population from our Audit Survey. The survey asks customers to rate their experiences on a 5-point scale. Results represent customers who gave a score of 4 or more. 

³Results represent customers who gave a score of 3 or more out of 5. The results would be 64% using the same approach as that used for 2022-23 based on scores of 4 or more out of 5.

⁴ Changes to measures and targets

Results represent customers who gave a score of 3 or more out of 5. The results would be 64% using the same approach as that used for 2022–23 based on scores of 4 or more out of 5.

All targets are unaudited.

What it cost