Push for more transparency over companies on the brink of liquidation

There's a push for more transparency over which businesses are on the brink of insolvency, to protect suppliers, employees and customers from being caught up in the fallout. Data from credit reporting company Centrix shows 699 companies were put into liquidation in the first five months of this year - up from 539 in the same period last year. IRD initiates more than 60 percent of liquidations, after a period of non-payment - and in 2021, more than half of tax debt was made up of unpaid GST and employment related taxes. Victoria University of Wellington Professor of Taxation Lisa Marriott believes cetrain business tax debts could act as an early warning sign, and wants to see this information passed on to credit ratings agencies. In a statement Inland Revenue says publicly sharing information about tax debtors before it goes through the courts is not permitted - but adds it is increasing its focus on significant tax debts. Chapman Tripp senior associate Janko Marcetic specialises in liquidations, and agrees IRD has the ability to share information more effectively, adding it should also flag 'phoenix' companies, where a director restarts the business under another name.