Managing an IRD tax debt just became significantly harder as the Inland Revenue aggressively tightens its enforcement net. I recently joined Kathryn Ryan on RNZ’s Nine to Noon, alongside Inland Revenue’s Tony Morris, to discuss the IRD’s ongoing, aggressive crackdown on outstanding tax debt.
From border arrests over student loans to custodial sentences for GST fraud, the message from the authorities is crystal clear: the post-pandemic period of leniency is officially over. With an estimated $10 billion in outstanding debt, the IRD is under immense pressure to tighten the net.
But as a lawyer working closely with businesses on the ground, I see the other side of this ledger.
Our current economic climate is already heavily stressed and stretched. Many business owners are not trying to evade the system; they are simply trying to survive a brutal economic winter. When the IRD moves straight to hardline enforcement, we risk pushing viable, employment-generating companies over the edge.
My proposition on the program was simple: We need a dedicated, specialized negotiations team within the framework.
We need an expert unit focused on business rehabilitation, not just debt collection. This team should look beyond raw data to analyze the actual viability of a strategic business. We need to look at how to help a company survive, keep its doors open, and protect jobs, all while structuring a realistic pathway to resolve their debt over time.
Cracking down on fraud is necessary, but squeezing struggling, viable businesses out of existence helps no one—and certainly doesn’t recover $10 billion. We need pragmatic balance.
If your business is currently feeling the squeeze or facing pressure from the IRD, the absolute worst thing you can do right now is put your head in the sand. Front up, engage early, and let’s work on a strategic path forward.
Listen to the full discussion on RNZ here: https://www.rnz.co.nz/national/programmes/ninetonoon/audio/2019041554/inland-revenue-crackdown-on-tax-debt-continues
Relevant articles of interest:
Dave Ananth wants to see a different approach to collecting tax arrears from businesses
2 Critical Outcomes: Why Tax Debt Enforcement Now Prioritises Timing Over Law
The Critical Case for Reforming Student Loan Interest: Why Flexibility is Essential
Dave Ananth on RNZ Nine to Noon — IRD Cracks Down on Overseas Student Loan Debt