Inland Revenue calls out horticultural tax dodgers

The Inland Revenue department is intensifying its efforts to tackle tax evasion within the horticultural sector. They have pinpointed several problematic practices, such as staff being paid in cash and the use of intricate schemes to conceal financial dealings. The department issues revenue alerts infrequently, but in this case, they are ramping up their focus due to significant concerns.

They are particularly vigilant about growers, contractors, and subcontractors, recognizing that false invoices are sometimes created to mislead the system, potentially leading to underpayment of GST, PAYE, and other taxes. If such fraudulent activities are detected, the department can amend tax assessments or pursue legal action.

The IR is also scrutinizing new GST registrations by entities in the horticultural sector, especially those that may exist only to generate false invoices. Applications from non-taxable entities will be rejected. They are also examining non-compliance with schedular payment obligations and the misuse of certificates of exemption and tailored tax rates by sector taxpayers.

Inland Revenue is stepping up efforts to recover outstanding debts in the horticultural sector and will apply all available collection powers. They are also concerned about broader non-compliance with GST, PAYE, and income tax obligations related to labor supply in the sector. If they identify evidence of tax offenses, they may share information with other regulatory bodies like the Police and the Labour Inspectorate/MBIE.

During the fiscal year ending June 30, 2026, Inland Revenue initiated around 130 investigations into horticulture businesses, uncovering $7.2 million in discrepancies. Currently, 45 cases remain open. The department has also sentenced three individuals involved in the horticulture sector to home detention for tax evasion charges.