[New Zealand] Inland Revenue calls out horticultural sector for bad practices

In New Zealand, Inland Revenue has warned the horticultural sector that it is cracking down on bad practices, Farmers Weekly reports.

The department stated that it had identified prevalent practices in the sector that represent a threat to the integrity of the tax system, including staff being paid in cash, or complex arrangements being used to obscure what is happening.

It has issued a revenue alert about the non-compliance. Such alerts are reportedly issued infrequently by the department’s commissioner when there are significant or emergency areas of concern.

According to Inland Revenue, it is stepping up its focus on growers, contractors and subcontractors. It cited situations where false invoices were created to obscure the true nature of transactions, which could lead to people and businesses paying less in GST, PAYE and other income tax.

It said that in such cases it would consider amending tax assessments but prosecution was also an option.

In addition, the department is increasing its scrutiny of new applications for GST registration by entities in the horticultural sector, including companies that may have been set up for the sole purpose of issuing false invoices.

Entities that aren’t carrying on a taxable activity will see their GST registration application declined.

Inland Revenue reportedly said it is also looking at non-compliance with schedular payment obligations and at the use of certificates of exemption and tailored tax rates by taxpayers in the sector.

It is increasing action to pursue outstanding debt in the horticultural sector and will use the full range of powers to collect it.

Source: Farmers Weekly

In New Zealand, Inland Revenue has warned the horticultural sector that it is cracking down on bad practices, Farmers Weekly reports.

The department stated that it had identified prevalent practices in the sector that represent a threat to the integrity of the tax system, including staff being paid in cash, or complex arrangements being used to obscure what is happening.

It has issued a revenue alert about the non-compliance. Such alerts are reportedly issued infrequently by the department’s commissioner when there are significant or emergency areas of concern.

According to Inland Revenue, it is stepping up its focus on growers, contractors and subcontractors. It cited situations where false invoices were created to obscure the true nature of transactions, which could lead to people and businesses paying less in GST, PAYE and other income tax.

It said that in such cases it would consider amending tax assessments but prosecution was also an option.

In addition, the department is increasing its scrutiny of new applications for GST registration by entities in the horticultural sector, including companies that may have been set up for the sole purpose of issuing false invoices.

Entities that aren’t carrying on a taxable activity will see their GST registration application declined.

Inland Revenue reportedly said it is also looking at non-compliance with schedular payment obligations and at the use of certificates of exemption and tailored tax rates by taxpayers in the sector.

It is increasing action to pursue outstanding debt in the horticultural sector and will use the full range of powers to collect it.

Source: Farmers Weekly