“The IRD’s got quite a lot of arrears that they need to collect in, which built up post-Covid when they were taking the more softly approach.
“Historically, they’re closer to an even split between themselves and all other creditors, but at the moment, they’re definitely making up a large portion of the applications.”
The ramp-up in the IRD’s debt enforcement has resulted in a significant increase in work landing on the Insolvency and Trustee Service (ITS), or the Official Assignee, which acts as the court’s default liquidator when no other firms take on an appointment.
“They’ve seen a huge jump in their workload, particularly this year, because the IRD’s pushing so much work through,” Pronk said.
“Only a small portion of it actually gets picked up by the IRD’s preferred providers, the rest then just goes to the Official Assignee by default.”
According to data currently available, there have been 546 ITS-administered liquidations through 11 months of the latest financial year (July 2024 to May 2025).
This surpassed the 381 liquidations recorded as of June 2024.
Meanwhile, there were 97 ITS-administered liquidations in the June 2022 financial year.
An IRD spokesperson said liquidations are a matter of last resort and used when all other avenues to help the taxpayer are exhausted.
“Inland Revenue is conscious of the financial pressures that individuals and businesses may be under and seeks to work with all taxpayers who are in debt to find an acceptable way to resolve those debts.
“[We] will continue to approach debt discussions with empathy and understanding, and with the objective of maximising revenue over time.”
The spokesperson said there has been an increase in focus on compliance and debt, with extra funding from the Government.
“This has resulted in increased insolvency proceedings taken by the commissioner.”
The IRD was given an extra $35 million annually in Budget 2025 to tackle New Zealand’s ballooning tax debt.
‘It’s pretty tight out there’
Pronk said overall company liquidations in 2025 were also tracking to exceed last year’s total.
Companies Office figures show there were 2500 liquidations in 2024, up from 1829 in 2023.
Through five months so far this year there have been 1056 liquidations.
“They’re going to continue to track up. We normally see them increase towards the third and fourth quarter,” Pronk said.
“Part of that is because there are fewer public holidays, so the stats aren’t affected as much as they are in the first half of the year.
“But overall, I don’t think things are going to turn around, this year at least.”
Pronk said a lot of companies are having a hard time.
“It’s pretty tight out there… there’s not as much free money floating around as there once was … consumer spending’s pulled back.
“A number of the inquiries we’re getting are ones where they’ve [companies] just run out of runway, they don’t have the funds to meet all the payments they need to.”
But the figures are still well down on what we saw during the Global Financial Crisis (GFC), Pronk said.
“We’re kind of in line with what we would have seen after the GFC, around 2012-13.
“Compared to previous recessions, this one… appears to be dragging out over a longer timeline rather than a short, sharp peak.”
Cameron Smith is an Auckland-based business journalist with the Herald news team. He joined the Herald in 2015 and has covered business and sports. He reports on topics such as retail, small business, the workplace and macro-economics.
