Global Daily Tax News, New Zealand Challenging Horticulture Sector Non-Compliance, (Aug 7, 2026)

New Zealand's Inland Revenue (IR) has issued a Revenue Alert highlighting issues of concern in the horticulture sector.

The agency has said it is increasing its focus on growers, contractors, and subcontractors.

IR said a number of practices prevalent in the horticultural sector pose a significant risk to the integrity of the tax system. "The practices include workers being paid in cash, complex contracting arrangements being used to obscure what's really going on, and obligations under the schedular payments rules not being met," the agency said.

The agency said: "Inland Revenue is aware of arrangements where false invoices are created and used to obscure the true nature of transactions and can result in the under-reporting of GST, PAYE, and/or income tax obligations. Where these sorts of arrangements are being used to evade tax, Inland Revenue will look to make or amend assessments. Prosecution is also an option."

The Inland Revenue is increasing scrutiny of new applications for GST registration by entities in the horticultural sector, including notably companies established for the sole purpose of issuing false invoices.

"If an entity isn't carrying on a taxable activity (or isn't intending to carry on a taxable activity), its GST registration application will be declined," IR said.

Inland Revenue is also looking at non-compliance with schedular payment obligations and at the use of certificates of exemption and tailored tax rates by taxpayers in the sector. In addition, the agency is increasing action taken to pursue outstanding debt.

Inland Revenue has also expressed concerns about broader non-compliance with GST, PAYE, and income tax obligations in relation to the supply of labor. IR has said it may share information about a taxpayer with other agencies where evidence of non-tax offences is uncovered.

In the year to June 30, 2026, Inland Revenue opened around 130 investigations into horticulture businesses, involving NZD7.2m in discrepancies. 45 cases are still open, it said.