Tax Audit Activity: What the Latest Data Reveals

Inland Revenue (IR) in New Zealand has significantly intensified tax compliance efforts over the past year. According to a report published in April 2025, automated screening systems analysed over three million tax returns in New Zealand, leading to 30,000 reviews. Combined with voluntary disclosures, these measures contributed $859 million to tax revenue.

More than 80% of audit claim activity in New Zealand relates to GST and income tax returns, according to the latest Audit Shield data (2024–2025). That means even well-run businesses can expect Inland Revenue to ask questions sooner or later. Being prepared – and knowing you have support if it happens – makes all the difference.

For our clients, this means increased scrutiny of tax filings, with IR focusing on identifying inconsistencies, undisclosed income, and potential non-compliance.

While GST Verification claim activity declined by nearly 7% compared with 1 April 2023 to 31 March 2024, it remained the most frequent claim type, accounting for 53.33% of all Audit Shield claims. This underscores the sustained scrutiny on GST compliance, even as IR adjusts its enforcement priorities.

Additionally, instances where undisclosed earnings are deposited into bank accounts without clear explanations continue to trigger reviews and investigations.

Whilst Nairn Fisher makes all efforts to prepare your financial accounts and tax returns accurately, we cannot control Inland Revenue (IR) from randomly instigating review or audit activity on you or your business. When a review or audit hits, it is often a result of a specific crackdown through a variety of data matching or other artificial intelligence sources.

These methodologies have proven to work very well and there are no signs to show that IR will ease up on these.

Offering Audit Shield to our clients' ensures peace of mind and financial security against unexpected scrutiny. As compliance efforts continue to ramp up, proactive measures like audit protection remain crucial.

All Nairn Fisher clients* are invited to participate in our Audit Shield Master Policy and information will be sent out shortly. Cover is available for self employed, salary and wage earners, and businesses with turnover under $100 million.

Get in touch with us today if you would like to know more.

*Nairn Fisher is your tax agent.

This article offers general insight and may not reflect your unique circumstances. We recommend conducting your own due diligence and seeking professional guidance for advice. Feel free to get in touch if you require assistance.