Penalty and interest debt owed to Inland Revenue is running into the billions of dollars.

The trend's revealed in the department's annual report.

It shows in the last financial year IRD charged $3 billion in penalties and interest - a figure that accounts for just over 48 percent of all overdue debt owed to the department.

The numbers show the amount of overdue debt to IRS older than two years now stands at $4 billion - that's up from $2.25 billion four years ago.