Would you opt out of paying tax if you could?


The IRD’s Deputy Commissioner Mike Cunnington has said, “The vast majority of New Zealanders want to pay their tax and get it right.

This made me think.  To some degree taxes are like an insurance policy.  We get free medical care when we need it, yet we pay towards the medical care of others when we are healthy.

What would happen if you were allowed to opt-out of all taxation, but in return, had to shoulder the actual cost of living your life? ¬† Additionally, you’re not allowed into any local park without paying and all parking costs money, even on residential streets. Read more »

Fewer on-line purchases to escape GST

At present, GST is not charged on imported digital products such as music, films and games that are downloaded or streamed from overseas and cloud software services that are hosted abroad.

Physical goods bought online worth less than $400 also generally escaped GST because the combined value of the tax and duty payable was less than $60.

Revenue Minister Todd McClay has  asked officials to look at the measures other countries were taking to collect GST-type taxes, saying they appeared to be increasing the amount of tax collected.

This is the same Todd McClay that can’t get the IRD to bring its IT project in without a 600% budget overrun. ¬† Nice to know he’s coming for more of our money. ¬† Read more »


So what exactly do we define as “serious mismanagement”?

[The] IRD is changing the way child support payments are calculated, saying it is the first overhaul in 20 years.

It has admitted its budget has steadily increased from $30 million, to $163 million, and finally to $210 million. That’s a $180 million blow-out.

Labour’s finance spokesperson Grant Robertson asked Ms Ferguson who was responsible.

“This all happens and what’s the consequence within IRD? Is anyone being held to account? What is being done about this? It’s an extraordinary blow-out.”

Ms Ferguson told the committee she commissioned an independent review to learn from the mistakes made.

“The management of a project is, I think, the accountability of myself and my department – the recommendations were around the processes and the way that we set up that project.”

Under questioning, she admitted IRD Minister Todd McClay was not impressed with the increased budget.

“The minister was not pleased. Of course, any minister would want a project delivered on budget and on time.”

Mr Cosgrove said the people in charge had been asleep at the wheel.

“Money just keeps rolling, the cash registers keep clicking and the New Zealand public just keep scratching their head. If this was the private sector, somebody would be sacked.”

This has been allowed to meander along,¬†sucking more money from our collective pockets without any real public scrutiny. ¬† It’s one thing to say “$180M blowout”, but that’s on top of the original $30M budget set aside for it.

How does IRD Commissioner Ferguson still have a job? ¬†How is it that the opposition haven’t been raking Todd McClay over the coals for letting the IRD walk all over him? ¬†The $180M “blowout” is¬†six times the original budget.

Seriously, tell your customers that you want to increase all your¬†invoices by 600% of what you first quoted and see if you’re still asked back next time.

This is gross incompetence.   And nobody seems to be outwardly concerned other than just giving more money to the problem.
Read more »

Labour MP already talking tax breaks


Instead of doing Woman’s Weekly and lifestyle pieces, or holding up some mangy ham with tongs for the local rag, Stuart Nash reminds voters that the IRD may still have some of their loot.

A significant number of hard working New Zealanders should take 10 minutes out of their holiday time to see if they are eligible for a tax refund, says Labour MP Stuart Nash.

‚ÄúThe IRD is holding around $750m in unclaimed tax refunds going back four years. This is money that Kiwi‚Äôs have over paid in tax that they deserve to have in their back pockets. Read more »


The Labour Party and the IRD have something in common: they don’t want to listen

amazing Pics2

What a joke:

Inland Revenue spent $48,000 on noise-cancelling headphones, at a cost of more than $400 each, because staff complained their redesigned office was too loud. The IRD admits that was a waste of taxpayer money.

They are top-of-the-line, noise-cancelling headphones designed for listening to music. Official documents show taxpayers forked out as much as $549 for each pair. The minister in charge isn’t happy.

“I’m not sure the spending of this amount of money on headphones is a good use of taxpayer money,” says Revenue Minister Todd McClay. “No, it’s not a good look.”

I’d love a good set. ¬†¬† Read more »

Wipe your student loan: end your life

The headline on this article is only one step more absurd than the one on the actual story (Wipe your student loan: go bankrupt).  The inference is that students deliberately declare bankruptcy while overseas to avoid paying back their student loan.

Increasing numbers of Kiwis are going bankrupt overseas, allowing them to avoid repaying their student loan.

More than $6 million of student-loan debt belonging to 99 overseas-based Kiwis has been written off so far this year – an average of $60,000 each – according to figures released to The Dominion Post under the Official Information Act.

The number of overseas-based bankrupts having their loans written off has more than doubled from 42 last year. From 2010-12, the number ranged from 35 to 45.

OMG!  This must be a scandal, right?

Inland Revenue has played down the increase, and said student loans were not the main driver of most of the bankruptcies. “Most of these people also owe other creditors . . . It just happened these people had a student loan, which automatically gets written off along with their other debts when granted bankruptcy.”

The IRD “played down” the increase ¬†OMG! ¬†It’s a cover up!

(Wait for it) Read more »

IRD are driving people to an early grave

There is some irony with the government looking to crack down on pay-day loan outfits, repo men, and dodgy lending practices where the debt continues even after repossession, while at the same time being in charge of a tax department that  drives people to take their own lives

Taxpayers, some facing crippling penalties, are increasingly threatening to harm themselves when dealing with the taxman.

According to official Inland Revenue figures, the number of its clients making “self-harm” threats in the past five years has nearly tripled.

There was a six-fold increase in offensive behaviour towards staff and the amount of money outstanding on child support rose by more than $1 million.

The department is enlisting Lifeline to look at how it deals with distressed callers and staff facing abuse.

The figures do show a positive – online compliments have more than tripled in five years.

Inland Revenue commissioner’s correspondence manager, Christina Goodall, said the leap in self-harm figures could be because of “increased awareness” among staff.

Could. ¬†On the other hand it could also be because of inhumane practices that slowly squeezes the oxygen out of people where they no longer see a future worth being part of. ¬† Once those penalties start to accumulate, things start to look pretty dire. ¬† Read more »


A question for David Cunliffe about CGT



Killer question for Cunliffe on CGT.

How much will it cost to implement?

The IRD is in the process of spending about $1.5B replacing their current software.

I can be pretty sure that CGT has not been factored into that. The cost will mostly be upfront and will be 100s of millions of dollars.

This does not even count the whole compliance costs. Lawyers and accountants will be collectively licking their lips.

Best guess it will take at least 3 years to put in place and will be cash negative for at least 7 years.

Why doesn’t¬†anyone ever ask these questions?

Too busy looking at private emails I guess.


IRD Scam warning

This needs a wider audience

A woman says she was almost swindled out of nearly $1000 by a “very well-rehearsed” scammer claiming to be from Inland Revenue and demanding payments.

IRD says it’s looking into the scam after it received at least 18 reports of scammers calling people claiming to be from the IRD, including a man who says he’s been duped out of $6500 by the scammers.

Clara Iqbal told TVNZ’s Breakfast this morning that a man phoned yesterday and said he was the chief investigating officer at the IRD and that there was a warrant out to arrest her as she owed $987 “and if I didn’t pay within 24-hours they would take me to court which could cost thousands”.

The problem is that this will fluster people into complying.

Ms Iqbal said the scammer knew all of her details and even appeared to be calling from an IRD number.

The scammers have managed to spoof IRD’s 0800 number, making it seem a legitimate call on caller ID.

Knowing everything about someone… well, you know, welcome to being an idiot and putting your life on the Internet. ¬†But the spoofing of an 0800 number? ¬†That’s something else altogether. ¬†¬†¬† Read more »


In business? Hate provisional tax? Vote National


I, like many others, hate provisional¬†tax. ¬†It’s annoying, it frequently wants money from you before you have actually received it from your customers, and there is a big stick that if you guess too low, they’ll come beat you up a bit. ¬†Great reward for managing your business into growth.

Tom Pullar-Strecker reports on some changes that appear to be welcome at first glance

The much-hated provisional tax system that forces small businesses to forecast their tax liability a year in advance will be overhauled, Revenue Minister Todd McClay has all but confirmed.

McClay said he did not believe the provisional tax system was “fit for purpose”.

A “business transformation” programme under way at Inland Revenue, which the department expects to cost up to $1.5 billion, could allow firms to pay tax on their income in, or closer to, real time, he said.

It would be “wonderful” if Inland Revenue could get to a point when income was taxed only when it was earned, but any changes would need to be balanced against the Government’s needs, he said.

If provisional tax was linked to being paid, more like GST, then that could be less of a burden. ¬†End of the month, tote up your total payments, cough up x percent. ¬† Read more »