Stuart Nash
MP for Napier
11 January 2015 MEDIA STATEMENT

Government wipes off $5 billion in tax debt

Since coming to office, the National Government has written off $5 billion* in tax debt owed by more than a million, Labour MP Stuart Nash says.

“There are two sides to the New Zealand economy under the National government: the ‘rock star economy trumpeted by Finance Minister Bill English and the one we don’t see or hear about

“That includes the 169,000 individuals who had $930,000 written off during the last tax year. This amount has increased by over $200,000 since the 2008/2009 tax year and by nearly $300,000 since the 2009/2010 tax year – the supposed height of the global financial crisis.

“None of these figures include those individuals who are in an arrangement with the IRD to pay back overdue tax debt in a managed way. In 2014, this number increased to 81,900; up from 63,000 in the 2009 tax year.

“We also haven’t heard about the 720,000 New Zealand companies who have had their total tax liabilities written off by the IRD because the IRD has assessed that their ability to ever pay back this debt is zero.

“We need to acknowledge that our so-called ‘rock star’ economy isn’t all about beer-and-skittles for a great many hardworking Kiwis”, said Stuart Nash.

* Write-off value excludes Child Support debt and includes Student Loan, KiwiSaver and Working for Families debt. It includes penalties and interest written off.

Attached: Answers to written questions 08151, 08245 & 08248 from the Minister of Revenue

PQ: 08248 (2014) Stuart Nash to: Revenue

Question: How many companies have had principal tax debt written off by year over the past six years?

Response:
The following table shows the number of companies that have received a write-off in the last 6 financial years.

Financial year ending Total companies
30/06/2009 127,612
30/06/2010 111,154
30/06/2011 111,661
30/06/2012 113,951
30/06/2013 123,809
30/06/2014 132,162

Note:
1. Due to system constraints and time limitations, we will not be able to separate principal debt written-off for companies, as this is not regularly reported.
2. Write-off value excludes Child Support debt and includes associated PAYE debt eg KiwiSaver and Student Loans.
3. Write-off action is applied to the total debt at the time and not based on, or individually applied to separate debt components that make up the debt

PQ: 08245 Stuart Nash to: Revenue
Question: How many individual taxpayers have had principal written off by year over the past six years?

Response:
Write off action is applied to the total debt at the time. Therefore the principal cannot be separated out. The following table shows the total number of individual tax payers that have received a write-off in the last 6 financial years and the total write-off value.

Financial year ending Volume individuals who have received a write-off Total Write-off value
30/06/2009 255,328 $722,366,614
30/06/2010 206,775 $666,830,272
30/06/2011 192,227 $785,465,952
30/06/2012 180,860 $848,618,999
30/06/2013 176,198 $924,731,242
30/06/2014 169,941 $930,158,999

Note
1. Write-off value excludes Child Support debt and includes Student Loan, KiwiSaver and Working for Families debt
2. The figure provided includes penalties and interest written off.

Question 08151: How many people have entered into arrangements to pay off outstanding tax debt per year over the past six years?

Response:
The following table shows the total number of arrangements created for individuals with overdue debt for the past six years

Financial year ending Total arrangements
30/06/2009 63,243
30/06/2010 74,839
30/06/2011 72,046
30/06/2012 70,080
30/06/2013 74,688
30/06/2014 81,945

Note
1. Arrangement data includes debt elements from Student Loans, KiwiSaver and Working for Families Tax Credits. Child Support debt is excluded.
2. Due to system constraints, Inland Revenue cannot separate out arrangements for only tax debt.

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