14 Aug 2013

Research that people who owe tax get off lightly, rejected

10:30 am on 14 August 2013

The Government is rejecting a study finding that people who owe tax get off more lightly than beneficiaries in debt.

The research from Victoria University, says the Ministry of Social Development puts much more effort into chasing its debt than does Inland Revenue.

Inland Revenue wrote off $435 million in overdue tax, while the ministry wrote off $9 million in debt in the 2011/12 year.

Revenue Minister Todd McClay said there are many possible reasons for waiving tax debt, such as when companies go bankrupt.

Penalties or interest may also be written off to keep a company in business.

Mr McClay said IRD collected $4 billion in outstanding tax last year.