Business Transformation: Less time, lower cost, more benefits

Revenue Minister Todd McClay says Inland Revenue’s Business Transformation programme is likely to take less time, cost less, and deliver more benefits than the original projections.

Mr McClay was speaking at the Trans-Tasman Business Circle, where he released two consultation papers. The first, making it simpler for businesses to manage PAYE and GST and the second looking at the Tax Administration Act.

“There are good reasons for the shortened time frame and lower costs. We selected a core tax system that’s built for tax and is already operating in other tax jurisdictions. Because this needs less customisation, it means Inland Revenue’s timeframe is likely to be reduced two or three years – so the programme is now planned to be completed within seven years instead of the ten years originally indicated.

“Also of great help is the commercial expertise that Inland Revenue has brought on board to help build the new system – people and companies who have done this work before, both in New Zealand and internationally.

“I fully expect this project to come in well below the high end of the projections – $1.9 billion – and it is now likely that the new Crown funding required will be under $1 billion,” says Mr McClay.

Today’s release is the second round of the Government’s “Making Tax Simpler” consultation series that commenced in March this year.

“Essentially what’s being proposed is to make PAYE and GST systems fit with business processes rather than the other way round,” says Mr McClay.

“So for example, why not allow employers to carry out their PAYE obligations when they pay their employees, rather than at a separate time required by Inland Revenue.”

Mr McClay says the focus for proposed changes to GST is on digital filing to reduce time and cost to businesses.

“For GST, we’re proposing that businesses be able to do their GST returns directly through the accounting software packages that many of them use, rather than making them file separate GST returns.

The Minister says the second discussion paper released today looks at the Tax Administration Act and how the current system might be made simpler for everyone and more flexible for the future.

“It looks at the role of the Commissioner of Inland Revenue, how taxpayer information can be used more efficiently to provide better services for New Zealanders, and the role of taxpayers and third parties,” says Mr McClay.

To make a submission or to read the full details of the proposals, go to makingtaxsimpler.ird.govt.nz.