Link-up aims to catch lost tax

Press, 5 December 1988, Page 9

Link-up aims to catch lost tax

PA Wellington Taxpayers may have to give tax numbers to banks, share registries and other income sources in a big move by the Inland Revenue Department to capture millions of dollars now escaping the tax net, the “Dominion - Sunday Times” reports. The proposal will also involve linking revamped I.R.D. and Social Welfare Department computers in an attempt to save millions more in benefit abuse.

The plan arises from a review of the IRD just completed by the International Monetary Fund for the Minister of Revenue, Mr de Cleene. It would follow similar moves in Australia and elsewhere, where a “taxfile integrity number” (T.1.N.) has been introduced.

Results of the IMF review, announced in the Budget, will be issued next month. The study was aimed at reviewing the IRD’s objectives, functions, structure and operations.

Mr de Cleene said the interim report he had received was “constructively critical” of his department. It praised the I.R.D.’s efforts in the face of the dramatic changes that had taken place in the tax system in recent years and the high staff turnover.

Many of the I.M.F.’s recommendations were now being carried out by the I.R.D. commissioner, Mr David Henry, Mr de Cleene said.

One of the most important recommendations is adoption of the T.I.N. and buying a new I.R.D. computer that could be aligned to one in the Social Welfare Department.

Under the T.I.N. system, taxpayers would register their tax number with any organisation from which they received income, such as banks, share registries and, if a beneficiary, the Social Welfare Department. If they chose not to register, the I.R.D. would require the organisation to deduct tax at the highest rate.