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New Zealand taxpayers to get a smarter system

19.7 million taxpayer accounts have been transitioned from one Inland Revenue computer system to another, thereby clearing the latest hurdle of one of the biggest IT projects ever undertaken in the state sector.

As reported, the Business Transformation Release 3 has allowed every single taxpayer account for Income Tax and Working for Families migrated from the legacy computer system to the new system called START.

New tax system

The system involved a number of transactions and processes.

It went live recently and has been tested in the real-world environment, processing NZ$ 33 million in Working for Families payments for 161,000 customers.

It will continue to be tested in the coming weeks, bringing in extra staff to handle customers’ questions.

It is during the early days when bumps are experienced along the way. However, Inland Revenue guarantees that plans are in place and will be ready to respond.

The short-term inconvenience to customers while they get used to the new system is more than offset by the significance of the changes.

Benefits of the system

Every taxpayer affected will now have their account managed in a smarter, fairer and more efficient way.

Too many people have been paying the wrong secondary tax. The new technology will now be smart enough to spot if someone is overpaying tax and help them correct it with a tailored tax code.

It will make a big difference for those with more than one job or an irregular income. Moreover, it allows for automatic tax assessments.

From late-May to mid-July, salary and wage earners will find out if they have a refund owing or a bill to pay. About 1.65 million customers will be told they have a refund.

If this year is anything like 2018, an estimated NZ$ 860 million will be refunded straight into the bank accounts of the people.

Around 330,000 families receiving Working for Families support will receive more accurate payments during the year.

This means they get the assistance when they need it and have less chance of a debt to repay at the end of the year.

Past and future steps

All tax revenue is now administered in the new system, after GST, withholding taxes, fringe benefit taxes and others were migrated in the past two years.

Next steps include the migration of other systems administered by IR such as student loans, KiwiSaver and child support in the next two years.

Revenue Minister Stuart Nash recognised all the staff and agencies, including banks and ICT companies who worked on the project.

He shared that the Business Transformation Release 3 project has involved the biggest changes to the tax system in two decades.

Activities leading to its live implementation include:

  1. Two million customers were contacted in advance
  2. 3,600 staff received special training
  3. 92,300 tests were completed beforehand
  4. 7 million accounts were migrated to the new system
  5. Records of 100 million transactions were migrated
  6. 3 million web account logons were updated
  7. More than 1,100 separate tasks were completed to cut-over the systems
  8. A core team of 271 people worked over the holiday weekend with support from a further 50 people for distinct processes


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