Late tax filers studied

Inland Revenue has turned to Wellington business intelligence company Datamine to help it better understand why a growing number of small and medium sized enterprises aren't filing their tax returns on time.

The department has contracted privately- owned Datamine to work alongside Inland Revenue staff in a $75,000 - $100,000 pilot due to run till October.

An Inland Revenue spokesperson says the goal of the pilot project is to gain a better understanding of factors common to businesses which don't file returns and pay taxes on time, "so we are better able to tailor our services and products to help those people".

Datamine will analyse information on more than 320,000 businesses which turn over less than $100 million annually, but won't get access to their "unique identifiers" to preserve taxpayer confidentiality.

The company will examine businesses' location, income, PAYE payments, information from their gst returns, payment dates and past payments and return filing histories to see if there are common patterns among late filers and late payers.

Inland Revenue has a "robust" data warehouse and data analysis tools, but Datamine's assistance will help it increase its in-house capability in data analytics, the spokesperson says.

The department says it has not undertaken comprehensive research to understand the reasons why some businesses are late filing returns and payments before.

The number of tax returns that are filed late has been increasing over time, according to Inland Revenue. "Partly this is in line with the country's generally increasing level of indebtedness," the spokesperson says.

Inland Revenue is a dream reference customer for Datamine, which squeezed into Deloitte's list of the 50 fastest-growing firms in New Zealand in 2002, ranking 49th.