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Why tax administration matters

It is important

The tax administration system operated by Inland Revenue is a key part of the infrastructure which supports New Zealand society.

Taxes are by far the biggest source of government revenue. They fund schools, hospitals, roads, social assistance, policing and other government-provided services.

More New Zealanders interact with Inland Revenue than with any other government agency. The efficiency and effectiveness of the tax administration system is important for:

  • everyone who interacts with Inland Revenue to meet their obligations or access their entitlements;

  • everyone who uses services provided by the New Zealand Government; and

  • taxpayers, who pay the system’s costs.

 

It is big and expensive

There are millions of interactions with the tax administration system every day, across the economy. These interactions include tax deductions from wages, salaries and interest payments, payments like income tax and other transactions like student loan repayments and Working for Families tax credits.

Revenue collected and payments disbursed - 2013/14

 

Revenue collected and payments disbursed - 2013/14

 

There are significant costs for businesses and individuals in meeting their obligations to Inland Revenue. In addition, administering the tax system cost the Government over $650 million in 2013/14.

 

The Government is considering how the tax administration system can use modern digital technology and connected government services to improve customer experience and reduce compliance costs for customers and administrative costs for Inland Revenue.

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