NZ Herald reports today that the latest tax report from Inland revenue shows staggering debt figures for the future.
Tax debt climbed to $4 billion by the end of June last year and Inland Revenue says it could more than double within the next five years.
A report into tax debt released by the Auditor General said the growth rate is more than the department can handle with its current procedures.
"[The IRD] is proposing to better understand taxpayers, provide taxpayers with improved online tools, and pilot new approaches designed to enhance its processes for collecting tax debt," Auditor-General Kevin Brady said in his report.
Tax expert from accountant firm PricewaterhouseCoopers, John Shewan, said the debt increase is due to a variety of factors including the current economic climate, IT systems and new programmes being introduced.
He said KiwiSaver, Working for Families and student loans have all been added to the IRD's portfolio in the past nine years.
Shewan said the amount of tax collected has increased."It's like running a business, isn't it? If you increase your sales, you'll get more debtors and your bad debtors will go up," he said. Read More
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Recent reports from New Zealand debt collectors show a significant rise in delinquent accounts moving to debt collection services. NZ Blacklist is also experiencing the same effect. Website 'Stuff' reports....
A "relaxed attitude" from kiwi firms to collecting debts is finally changing as pressure tightens on the bottom line according to Dun & Bradstreet.
The credit reporting and collections agency said today the number of debts referred for collection has more than doubled in the March quarter compared to the same period last year, and the average dollar value of each collection has also increased.
Debt collection referrals from Auckland firms increased by 160 percent in the first quarter, while Wellington firms saw a 139 percent increase and Christchurch firms referred 134 percent more collections than last year.
Overall, New Zealand businesses reported 127 percent more debts for collection in the March quarter this year than in the same period last year. Read more