The Inland Revenue Department (IR) is receiving a major funding increase in Budget 2025—and it’s not just for show. This extra investment is squarely aimed at increasing tax compliance and stepping up debt collection efforts across a range of areas.
Commissioner Peter Mersi has made it clear: the new funding is designed to ensure that those who do meet their tax obligations can be confident that IR is doing more to pursue those who don’t. For businesses and individuals behind on tax, the message is simple—expect more contact, more audits, and fewer chances to fly under the radar.
Budget 2025 allocates an additional $35 million per year to Inland Revenue, which builds on the $29 million added last year and includes the continuation of $26.5 million in previous temporary funding, now made permanent.
This funding will support:
- Enhanced audit and enforcement in high-risk sectors
- Investigations into property, organised crime, trusts, and the hidden economy
- Expansion of automation and data-sharing with third parties like banks
- Smarter, faster detection of tax discrepancies
This is a deliberate return-on-investment strategy. Inland Revenue is expected to generate $4 in additional revenue for every $1 spent in the first year, increasing to $8 per $1 by year two.
What IR is already doing in terms of chasing the non-compliant:
- $880.8 million in additional tax assessed from audits (year to 31 March 2025)
- 134 liquidations this quarter—up 67.5% on the same time last year
- $2.985 billion collected through debt recovery (year to date), up from $2.688 billion
- Prosecutions have more than doubled this quarter
These aren’t just numbers. They represent a clear shift toward more aggressive enforcement, increased intelligence-led targeting, and a strong push to recover money owed.
What You Need to Know
If you’re behind on your tax, have undeclared income, or are part of a sector IR has spotlighted (such as property or cash-heavy industries), now is the time to act. Inland Revenue is ramping up both its people power and technology to find and address non-compliance faster.
This funding boost means:
- Increased chances of an audit
- Less time before missed payments turn into enforcement action
- More focus on old debts, including Small Business Cashflow Scheme loans in default
If you’re concerned about your tax position, whether it’s past non-compliance, unpaid debt, or confusion about obligations, now is the time to seek professional advice.
Voluntary disclosure options remain available, and acting before IR contacts you can substantially reduce penalties and avoid prosecution.
Need help getting back on track with the IRD? We assist individuals and businesses with disclosures, audits, and managing tax arrears. The earlier you act, the more options are available.
Disclaimer: This blog is for general informational purposes only and does not constitute legal or financial advice. Always seek professional guidance tailored to your situation.