Labour MP calls for tax debt amnesty

This is odd for a number of reasons – Labour MP for Napier Stuart Nash has called on the Government to declare a tax amnesty.

All About Hawke’s Bay (press release):

Napier MP call’s for an amnesty on overdue tax debt.

Labour is calling on the Government to declare an amnesty after Napier MP Stuart Nash released the figures for overdue tax debt.

Figures show Palmerston North debt is $139m, Napier is $496m and Whangarei has $86m outstanding.

Outstanding taxes have increased in Nelson by $67.9 million (119 per cent), Timaru $15.6m (76 per cent) and Greymouth $5.6m (51 per cent) in the last six years.

In total, Inland Revenue is owed more than $5.03 billion, up from $4.5b in 2008-09. IRD spends about $90m a year chasing outstanding debt.

Mr Nash said the figures, which don’t include child support or student loan debt, demonstrated a high level of economic hardship and deprivation in many regions.

He said much of the debt was held by small-to-medium business owners, not large corporates or high-net-worth individuals who have engaged expensive lawyers.

As a Labour party list member, Mr Nash is now calling on Revenue Minister Todd McClay to declare a government amnesty.

Nash isn’t a Labour Party list member, he’s an electorate MP. Surely a press release would get that right? The Labour Party website:

Stuart Nash

  • MP for Napier
  • Spokesperson for Forestry
  • Spokesperson for Energy
  • Spokesperson for Land Information
  • Spokesperson for Statistics

And Nash isn’t spokesperson for anything to do with Revenue (Clayton Cosgrove) or Finance (Grant Robertson), nor does he have any leadership role (he’s 26th in the \website pecking order).

And this press release is not yet on Labour’s ‘News’ web page.

Bizarre.

But the oddest thing of all the suggestion that there should be an amnesty on tax debt. He says that Inland Revenue is owed about $5 billion.

Has he thought this through?

Stuff checked things out with the Minister of Revenue in Tax debt rockets, Labour calls for amnesty

(Todd) McClay says a debt amnesty wouldn’t be fair to those who pay tax on time.

“It has been proven to be ineffective in other OECD countries and we will not be implementing one here,” he said.

“Most taxpayers pay their fair share and IRD actively pursues those who do not.”

He pointed out that  tax debt was reducing in most regions.

“Last year [IRD] collected $4.1 billion in overdue tax, which was a $752 million increase on the previous year – 69 per cent of that recovered tax debt came about after IRD made direct contact with the people and businesses in default.”