New Zealand Goes Easier on Tax Cheats Than Welfare Frauds

June 21, 2016 Taxation in New Zealand

UK Taxman Targets Criminal OrganizationsWELLINGTON – Tax evaders in New Zealand cost the economy significantly more than people committing welfare fraud, but they are much less likely to be prosecuted or pay back what they took.

The results of new research completed at the Victoria University in New Zealand shows that tax evaders in the country are much less likely to be prosecuted than people defrauding the welfare system, despite the fact that tax evasion has a much greater cost on the economy.

In most years between 800 and 1 000 people in New Zealand are prosecuted for tax fraud each year, while over the same time only 60 to 80 people are prosecuted for tax evasion.

It is estimated that welfare fraud costs New Zealand approximately NZD 30.6 million per year, while tax evasions sets the country back by NZD 1.24 billion.

On average tax evaders had skipped out on NZD 229 000 of tax obligations, while welfare fraudsters had inappropriately received NZD 76 000.

The results of the research also indicated that while people convicted of welfare fraud often paid back the entire amount of money obtained, offenders convicted of tax fraud paid back approximately 5 percent.

Photo by s_falkow