Auditor-General's Report A Wake-Up Call For IRD

ACT New Zealand Revenue Spokesman Rodney Hide said today that the Auditor-General's report on the IRD's `Performance of Taxpayer Audit' was a wake-up call for the IRD and the Minister of Revenue Michael Cullen.

"The IRD has been targeting `easy targets' and successful people just because their names appear in the rich list. This is wrong. Taxpayers should not be hounded just because they are a `soft-target' or because they are successful, Mr Hide said.

"Dr Cullen should make it clear to the IRD that while taxpayer audit is a necessary function, taxpayers should be treated with respect and that there should be a proper process for selecting audit targets.

"We are shooting our economy in both feet by having an IRD that hounds successful people and the so-called easy targets. Successful business people are either giving up trying to work and contribute to New Zealand - and taking it easy - or they are taking their money and business skills off-shore.

"That's nuts. It's counter-productive to drive out good, honest, hard-working businesses from New Zealand because of high taxes and IRD harassment. Michael Cullen should not just make sure that the IRD improves its audit procedures out of sight, but he should also follow the advice of the McLeod tax review and cap maximum income tax payments for individuals at $1 million. As Rob McLeod advised, this would be of huge benefit to New Zealand in capturing and retaining enterprise, capital and business talent.

"The Auditor-General found there is 'no standard practice or policy that binds investigators to proven methods of case collections' (p.13).

'The practices of investigators vary widely' (p.13).

'Audit manuals are out of date and not being consistently used' (p.13).

'Investigators' take-up of IRD's formal auditing training is low' (p.14).

'Some investigators tended to select cases that would easily achieve' (p.16).

'We are concerned that there is no standard practice or policy that binds audit staff to proven methods of case selection' (p.47).

"The Auditor-General's report into IRD Audit procedures is a wake up call. I will making sure that the IRD take on board the recommendations and lift their performance and treatment of taxpayers," Mr Hide said.

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