Foreword

Receiving cash payments but not declaring them for tax purposes is one way of avoiding or evading tax. In 2002, the Inland Revenue Department (IRD) began testing an Industry Partnership programme to try to reduce the incidence of undeclared income from cash transactions in selected industries.

Overall, the programme had some positive benefits for IRD and taxpayers. IRD generally performed well in designing, operating, and evaluating the programme. The programme included a lot of evaluation, monitoring, and self-critique, and subsequent adjustments to the programme. This was one of the programme’s strengths. However, IRD could have given greater attention to bringing into the tax system the people and organisations likely to have undeclared cash incomes.

IRD needs to ensure that lessons learned from the programme are recorded and reflected in operational guidance and support resources. During 2008/09, I will be asking IRD to report on its progress with this.

I thank the industry representatives and IRD staff who gave generously of their time and assistance for our audit.

K B Brady
Controller and Auditor-General

9 April 2008