[New Zealand] Businesses owe $1.4bn unpaid GST and PAYE from 2025 tax year

New Zealand businesses owe more than $1.4 billion in unpaid GST and PAYE from the 2025 tax year. Commentators have highlighted this as a sign of the stress that many parts of the economy are still under, RNZ reports.

An Inland Revenue breakdown of PAYE and GST still unpaid for the tax years 2018 through to 2025 has revealed that there is still almost $48 million unpaid from 2018, and $1.471 billion from the most recent year.

Of the 2025 figure, $432.9m reportedly relates to employer activities and $1.047b to GST. Just over $66m of this debt was from businesses or individuals who were bankrupt or in liquidation.

The country’s businesses collect GST on their sales and then send it to Inland Revenue when they file their GST returns.

Allan Bullot - a partner at Deloitte - had previously warned that GST debt could be creating a wave of zombie companies.

The construction sector had the largest share of unpaid PAYE and GST, with a total of almost $1bn over the tax years from 2018 through 2025.

Rental, hiring and real estate services were next with $533.5m.

On a measure of debt per thousand enterprises, electricity, gas, water, and waste companies reportedly had the largest unpaid amount in the most recent tax year.

According to Robyn Walker - a tax partner at Deloitte - Inland Revenue had been given a clear message to collect more of the money it was owed.

In recent years, the number of businesses being liquidated by Inland Revenue has leapt.

Ms Walker reportedly said that the data could suggest that other creditors to those businesses were in a precarious position.

If a business failed, Inland Revenue would be the first to be paid; potentially reducing a business's ability to pay anyone else it owed.

"People could be choosing to pay other business suppliers first - but they maybe aren't paying anybody... there's potential for a lot of collateral damage if Inland Revenue is allowing tax debt to accumulate," Ms Walker said.

She added that people who were unable to pay GST and PAYE should contact their accountant to ensure they still had a viable business.

For businesses hiring staff on the expectation that they could pay them a certain amount before tax, where it later transpired they could not afford the PAYE component, there was probably a bigger issue at play, she said.

"The business may not be viable or may need help in a more substantive way."

Shamubeel Eaqub - Simplicity chief economist - reportedly said that the data highlighted the distress many businesses were facing.

"Some businesses - not many - think it's okay not to meet their responsibilities.

"PAYE and GST are only collected on behalf of New Zealanders, it's not your revenue.... there's a risk to other creditors."

Mr Eaqub said businesses with tax debt were quite often not viable, and owners could be breaching their directors' duties.

"It can mean big problems, that's why the IRD has been so active... It's the right thing to do."

The data reportedly showed that Inland Revenue had written off $110.3 million of unpaid PAYE and GST in 2018, $109.1m in 2019, $85.5m in 2020, $94.8m in 2021, in 2022, $99.3m in 2023, $56m in 2024 and $7.6m from the last tax year.

Source: RNZ

(Quotes via original reporting)

New Zealand businesses owe more than $1.4 billion in unpaid GST and PAYE from the 2025 tax year. Commentators have highlighted this as a sign of the stress that many parts of the economy are still under, RNZ reports.

An Inland Revenue breakdown of PAYE and GST still unpaid for the tax years 2018 through to 2025 has revealed that there is still almost $48 million unpaid from 2018, and $1.471 billion from the most recent year.

Of the 2025 figure, $432.9m reportedly relates to employer activities and $1.047b to GST. Just over $66m of this debt was from businesses or individuals who were bankrupt or in liquidation.

The country’s businesses collect GST on their sales and then send it to Inland Revenue when they file their GST returns.

Allan Bullot - a partner at Deloitte - had previously warned that GST debt could be creating a wave of zombie companies.

The construction sector had the largest share of unpaid PAYE and GST, with a total of almost $1bn over the tax years from 2018 through 2025.

Rental, hiring and real estate services were next with $533.5m.

On a measure of debt per thousand enterprises, electricity, gas, water, and waste companies reportedly had the largest unpaid amount in the most recent tax year.

According to Robyn Walker - a tax partner at Deloitte - Inland Revenue had been given a clear message to collect more of the money it was owed.

In recent years, the number of businesses being liquidated by Inland Revenue has leapt.

Ms Walker reportedly said that the data could suggest that other creditors to those businesses were in a precarious position.

If a business failed, Inland Revenue would be the first to be paid; potentially reducing a business's ability to pay anyone else it owed.

"People could be choosing to pay other business suppliers first - but they maybe aren't paying anybody... there's potential for a lot of collateral damage if Inland Revenue is allowing tax debt to accumulate," Ms Walker said.

She added that people who were unable to pay GST and PAYE should contact their accountant to ensure they still had a viable business.

For businesses hiring staff on the expectation that they could pay them a certain amount before tax, where it later transpired they could not afford the PAYE component, there was probably a bigger issue at play, she said.

"The business may not be viable or may need help in a more substantive way."

Shamubeel Eaqub - Simplicity chief economist - reportedly said that the data highlighted the distress many businesses were facing.

"Some businesses - not many - think it's okay not to meet their responsibilities.

"PAYE and GST are only collected on behalf of New Zealanders, it's not your revenue.... there's a risk to other creditors."

Mr Eaqub said businesses with tax debt were quite often not viable, and owners could be breaching their directors' duties.

"It can mean big problems, that's why the IRD has been so active... It's the right thing to do."

The data reportedly showed that Inland Revenue had written off $110.3 million of unpaid PAYE and GST in 2018, $109.1m in 2019, $85.5m in 2020, $94.8m in 2021, in 2022, $99.3m in 2023, $56m in 2024 and $7.6m from the last tax year.

Source: RNZ

(Quotes via original reporting)