Outcome: Revenue

Due Customs revenue is collected to support Government social, economic, and fiscal objectives.
 
KEY IMPACT

› Due customs revenue is collected.

WHAT ARE WE SEEKING TO ACHIEVE?

Customs seeks to collect the due amount of customs revenue from import duty, excise equivalent duty, and goods and services tax at the border, and excise duty within New Zealand. This requires high levels of voluntary compliance to ensure customs revenue is correctly declared and efficiently collected when due.

We reduce the risk of noncompliance for traders and travellers through ease of access to information detailing their obligations and customs revenue declaration systems and processes that are efficient and easy to use. We provide credit and debt management services that focus on collecting revenue due in a professional, efficient, and reliable manner.

Customs acknowledges the current economic downturn will present challenges as some traders experience cash flow shortages. Consequently, we anticipate an increase in the numbers of traders who are not able to meet their revenue obligations in a timely manner. We will continue to maintain a consistent and equitable approach that focuses on collecting all revenue due to the Crown, recognising those who meet their revenue obligations fully and on time. We understand that in this challenging economic environment continuing to work closely with traders and other government agencies is likely to be in the collective interests of New Zealand’s economy, and international and excise trade.

While the majority of traders are compliant, we anticipate an increased likelihood of deliberate actions on the part of some traders to either defer or evade customs revenue obligations – actions that may constitute fraudulent activity. We will counter this possibility through an enhanced focus on customs revenue compliance and decisive action against those found to be evading their obligations.

WHY IS THIS  OUTCOME IMPORTANT?

Customs’ revenue collection is an important source of funding for the Government to achieve its priorities for New Zealanders.¹⁵ Customs revenue makes up about 15 percent of the Crown’s revenue base, and is expected to exceed $10 billion in 2009/10. It is important to maintain the integrity of the tax system by ensuring fair and effective administration and enforcement of taxpayers’ obligations.

Protecting the Crown’s revenue base is particularly important within the current economic climate, where the Government seeks to consolidate its revenue in order to deliver other goals and aspirations for New Zealand.

WHAT WILL WE DO TO ACHIEVE THIS OUTCOME?

We promote voluntary compliance and provide efficient assessment, collection, and debt management systems and processes. We will address non-compliance as required. These services are delivered across several Output Classes for Vote Customs.¹⁶

In this challenging economic environment, we will continue to collect customs revenue effectively and efficiently, and mitigate the risk of customs revenue evasion. We will deliver this through active monitoring of customs revenue compliance, work with other government agencies, our trader relationships, and feedback from our stakeholders. We will focus on making traders aware of their self assessment obligations, and customs revenue liability for goods in both international and domestic excise trade.

We expect that within the current economic conditions some traders will be experiencing difficulties in meeting their revenue obligations. We will therefore manage our collection and debt management services in appropriately responsive ways.

From 2009/10, we will focus on the following:

Collect due crown revenue

We aim to provide the Government with assurance that due revenue is collected. We will continue to implement a proactive revenue collection strategy that involves:

› education support for businesses,brokers, and the public
› customs revenue assurance strategy and programme informed by intelligence and delivered on a targeted basis
› closer working relationships with companies and other agencies to address emerging revenue collection issues early and in a timely fashion
› aged debt focus – intervening at the earliest possible time.

HOW WILL WE DEMONSTRATE SUCCESS IN ACHIEVING THIS?

We will continue to measure Customs’ impact as set out below:

Impact	Indicators	Performance measured by:
Due customs revenue is collected	» Revenue against Treasury forecast » Revenue compliance levels » Debt write-off levels.	» Revenue collected aligns with Treasury forecast measured by audited collection data. » Risk based compliance and assurance processes confirm high levels of compliance by generating assessed revenue (excluding penalties) that is less than 1 percent of total revenue collected. » Debt write-off in any one year as a percentage of total revenue collected in that year is no more than 0.02 percent.

¹⁵ Customs revenue supports other economic and social objectives. Excise duties are levied for a number of reasons including duties to reduce demand for goods, such as cigarettes contributing to social costs. Customs tariffs are collected on a small number of imported commodities to protect vulnerable industries in New Zealand from competing producers in lower cost economies.
¹⁶ The Revenue outcome is delivered through the following output classes: Policy advice; Intelligence and risk assessment services; Clearance of import, export, and excise transactions; Revenue collection, accounting, and debt management; Prosecutions and civil proceedings; and Technical advisory services.