New Zealand's Inland Revenue uses ML to screen 3+ million tax returns for compliance risk. In H1 2024 this drove a 50% increase in audits opened and NZD 600 million in undeclared tax identified, with NZD 859 million in total compliance revenue.
3,000,000+
Returns screened (H1 2024)
30,000
Returns flagged for review (H1 2024)
3,600 audits (50% more than prior year)
Audits opened (H1 2024)
600 NZD million
Undeclared tax identified (H1 2024)
859 NZD million
Total compliance revenue (H1 2024)
153.5 NZD million
Undeclared property income & GST identified (9 months, 2024)
227,000
Cryptocurrency users identified (2024)
10 of 14 NZD million
Property-debt recovered (within 1 month of first contact)
New Zealand's Inland Revenue (IRD) has used machine-learning models since at least 2022 to screen tax returns and business transactions for compliance risk, prioritising audit resources and flagging cases for review under mandatory human oversight, per IRD's official 'Our use of AI' page.
Results
In the H1 2024 half-year, IRD screened over 3 million returns, flagged 30,000 for review, and opened 3,600 audits (50% more than the prior year), identifying NZD 600 million in undeclared tax and NZD 859 million in total compliance revenue; targeted work also identified NZD 153.5 million in undeclared property/GST income and 227,000 cryptocurrency users with an estimated NZD 2.7 million in unreported income.
Implementation
Implementation detail (cost, timeline, staffing, conditions for success) is not yet available for this practice.
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Data sources
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