Appendix 1: The New Zealand Customs Service's voluntary compliance regime

Customs revenue obligations are outlined in law and subject to strong enforcement powers and penalties. Customs does not collect revenue with an "enforcement" mentality – its core strategy is to support voluntary compliance.

Voluntary compliance means that individuals and businesses are responsible for enquiring about their compliance obligations, lodging entries with Customs, declaring the required information completely and accurately, accurately calculating customs revenue due, and paying the amounts owing on the due date as required.

Voluntary compliance regimes usually offer incentives for complying and are designed to make complying easier. Those who choose not to comply face increasingly severe interventions by the regulator. The figure below, adapted from Customs' strategy for compliance, illustrates this. It assumes that most people are willing to comply and know what to do to comply, while progressively fewer people need stronger interventions to ensure that they comply.

Source: Adapted from Customs' strategy for compliance.