Published September 2003.
TAXI drivers are reportedly fleeing the country to avoid an industry-wide tax audit by the Inland Revenue Department.
Gold and Black Taxis owner Ian Gaskin said Wellington was first off the rank.
The department had demanded the names of Wellington taxi drivers over the past three years for a gst audit.
“It has sent a shockwave through the industry.”
Many had already fled to Australia to avoid the audit, or were planning to go.
“I don’t know how many I’m going to lose, but it scares me. One or two have gone a bit green,” he said.
There was massive tax evasion within the industry, with 1900 drivers struggling to make a living.
“This is a bankrupt industry.”
A quick audit of his own company suggested up to one-third of his cashflow could be lost in the fallout.
Those who had not been paying their taxes but chose to stay would lose their homes, cars and livelihoods.
“And all through their own stupidity,” Mr Gaskin said. “I’ve told them that the tax department is ruthless and if they’ve been dishonest, they will be bankrupted.”
Most of those fleeing were “African Muslims” who had applied for a taxi licence in Melbourne but had to wait 12 months before they became eligible to work.
“So they come here and work for 12 months.”
Inland Revenue’s Wellington service centre manager, Mike Hewetson, confirmed the audit was under way.
Inconsistent levels of tax compliance by taxi drivers in the past had led to the audit, he said.
“The taxi industry is a risk area because it is a cash industry,” he said.
Deregulation meant many more operators had entered the industry, some of whom may not be aware of their tax obligations.
The audits would check that all those with a turnover of more than $40,000 a year had registered for gst, and the employment status of taxi drivers. Where there was evidence of deliberate non-compliance, prosecutions might be taken.
” . . . Tax evasion is in effect stealing from the community”.
Wellington City Cabs manager Arthur Attrill said he expected the audit would flush up to 400 cabs from Wellington alone.
Airport and City Taxis manager Vinod Kumar said it would not be known till after the audit how many of his drivers were not meeting their tax obligations. But none had signalled their intention to leave.
“I have heard of some companies who have no drivers left.”
Taxi Federation president Tim Reddish said a tax audit of the industry was well overdue. He believed it would flush out many drivers who not only avoided paying tax but collected the dole as well.
“We know how many rides people (drivers) are getting . . . they can’t possibly be making a living out of it,” he said.
The Government had contributed to the problem by funding refugees into the business, Mr Reddish said.
