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Inland Revenue finds $45 million of undeclared tax in horticulture industry from last 10 months

Inland Revenue was pursuing the contracting firms through audits and prosecutions with nearly 100 such audits active at the moment. Photo: Supplied Inland Revenue has found $45 million of undeclared tax in the horticulture industry in just the last 10 months. Spokesperson Tony Morris said they were seeing concerning practices in the sector, that included people being paid under the table. He said some in the sector were still recovering from Cyclone Gabrielle, and dealt with increasing compliance costs and labour shortages, so paying tax could become an afterthought. Morris said Inland Revenue was also seeing cash sales not being reported correctly and withholding tax not being deducted on payments made, deducted at incorrect rates or not being reported. Growers typically hire labour through contracting fims and Morris said it's these firms that try and hide payments. Photo: 123rf Inland Revenue was pursuing the contracting firms through audits and prosecutions with nearly 100 such audits active at the moment. "While many growers are doing things right, they typically hire labour through a contracting firm, which then frequently pays the labourers in cash. Some of these contracting firms then use convoluted business structures to try and hide those payments," Morris said. "Not only does this mean they could avoid their tax, but it also means the labourers can get benefit payments they aren't entitled to or avoid their child support or student loan payments. "Inland Revenue is cracking down on this by requiring many contracting firms to withhold tax from their labourers payments, and pay that directly to IR. Where Inland Revenue identifies growers and other payers not correctly deducting or accounting for the tax, we are also following these up." Morris also said due to the high use of cash and migrant labour in the horticulture industry, it was a sector open to the abuse of workers. He said Inland Revenue worked with other government agencies to address such issues. "Alongside Hort NZ and Zespri, we work hard to ensure growers and contracting firms are aware of what they need to do to get things right, and appreciate the efforts of the many who do get it right." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.