Skip to main content

Budget 2024: The Government has announced FamilyBoost, a proposed new childcare payment to help eligible families with the rising costs of Early Childhood Education (ECE). Find out more: Beehive.govt.nz

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.
Value from compliance activities.
Compliance activity Cost
Audit $397 million
COVID-19 product reviews $267 million
Voluntary disclosures $219 million
Integrity reviews $89 million

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. 

Performance measures and if they were achieved.
2021–22 actual Performance measure 2022–23 target 2022–23 actual 2023–24 target
69.6% Percentage of customers whose compliance behaviour improves after receiving an audit intervention1 85% 74.5% (not achieved) 85%
Not achieved - This measure looks at the impact audit activity has on customer compliance behaviour across a range of compliance aspects. While we did not achieve the target, results for 2022–23 improved 4.9 percentage points from the previous year. Many of the customers reviewed had an overdue debt, an indication that the economic environment is affecting customers’ ability to meet their repayment obligations.
New measure The identified value of compliance activities over associated costs Baseline year $8.92 $10.00 see page below4
71.4% Percentage of litigation judgments found in favour of the Commissioner 75% 77.8% (achieved) 75%
69%3 Percentage of audited customers who are satisfied with their experience2 65% 64% (not achieved) Measure retired see page below4
Not achieved—This measure gauges the quality of the audit process across a number of aspects such as communication, education, how the auditor conducted themselves, timeliness, impacts on the customer, and overall experience. Results this year are similar to 2021-22. Customers scored us lower on the length of time the audit took. To support customers through the COVID-19 pandemic, we made trade-off decisions to manage the additional demand such as reducing, pausing or stopping some compliance activity, including some audit actions. This meant the timeliness of some audit activity was affected.

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

Output statement for the year ended 30 June 2023.
Actual 2022 ($000)   Actual 2023 ($000) Unaudited revised budget 2023 ($000) Unaudited budget 2023 ($000) Unaudited forecast 2024 ($000)
Revenue
$119,824 Revenue from the Crown $112,431 $112,431 $125,742 $133,634
$431 Other revenue $453 $149 $149 $149
$120,255 Total revenue $112,884 $112,580 $125,891 $133,783
$113,235 Total expenses $107,634 $112,580 $125,891 $133,783
$7,020 Net surplus or (deficit) $5,250 - - -
Last updated: 18 Dec 2023
Jump back to the top of the page