Last year, Inland Revenue wrote off $694.5 million in company tax debt. Much will never be recovered because the companies that owed it no longer exist – at least not in their original form.
Here is how the scam works. A company accumulates GST and PAYE debts. The directors continue to trade, knowing they cannot pay. When the debt becomes unmanageable, they walk away from the company, leaving nothing for creditors. Then they start a new company doing the same thing. The old company dies; a new one rises from its ashes: same directors, same business, no tax debt.
It is called phoenix activity. And our enforcement system cannot stop it.

