Inland Revenue has selected Fast Enterprises as its preferred supplier to design and supply the software platform that will run New Zealand's new tax and social policy administration system.
In beating fellow tech giants SAP and Oracle to the $1 billion-plus contract, Inland Revenue's Deputy Commissioner Change, Greg James, says the deal represented a “significant step” forward for the Kiwi tax department.
“Modernising New Zealand's tax system is high on the Government's business growth agenda,” James adds.
“Importantly, it will allow us to link our systems across government and the private sector, fit revenue processes seamlessly into customers' lives, and use information more intelligently.
“It will help deliver significant benefits to businesses and individuals, and create opportunities for public and private sector interests to work together to improve taxpayer and customer experiences."
James says he expected that work would begin in July. Initial estimates on the project believe it will cost between $1.3 billion and $1.9 billion between 8-10 years.
"Initial tasks will be the detailed design of new streamlined digital services for PAYE and GST information collection," he says.
“Ultimately, the new system will run the core tax and social policy administration. It will progressively replace our existing FIRST system."
James says Fast Enterprises was selected after an “exhaustive evaluation process” that included demonstrating how a new system would deal with Inland Revenue's most complex customer scenarios, as well as seeing Fast's solution operating successfully at other tax agencies.
“Fast Enterprises will supply a fully integrated tax solution, rather than building a system from the ground up," he adds.
“In addition we have begun and will continue extensive communications with business, tax agents, accountants, banks, software developers, individuals and other government agencies.”
Revenue Minister Todd McClay has also welcomed the announcement, claiming that a modernised tax administration system, enabled by the new software, would “significantly boost” the Government’s ability to support flourishing businesses in New Zealand and make tax compliance less costly and time consuming for all New Zealanders.
“Key individuals from Fast Enterprises were also instrumental in building our original software, FIRST, and that system has performed well for more than twenty five years,” McClay adds.
“This will also bring the time frame down from ten years to under eight and see the cost lower to near the bottom end of the forecast - at around $1.3 billion.
"I will be working with Inland Revenue to find further efficiencies and expect the cost could be as low as $1 billion."
Crucially for McClay, an increasing number of New Zealand companies are also involved in critical components of the transformation process.
“These include Tenzing’s contract for data profiling and DeloitteAsparona, which has been contracted to replace the FIRST integration layer and Assurity, which provides testing services," he adds.
According to McClay, in addition Xero, MYOB and other software providers are working with Inland Revenue to simplify processes for small businesses.
“The sheer scale and importance of this programme means we will source expertise both locally and internationally,” he adds.
McClay says New Zealand’s tax system is well regarded internationally and plays an important role in supporting the kind of stability, certainty and predictability needed to maintain and attract good investment levels in the economy.
“This work will improve our reputation in that area,” he adds. “Taxes pay for a wide range of vital public services that give us a quality of life envied elsewhere.
“So we need a tax system that does the best it can to collect the more revenue to improve the lives of all New Zealanders.”
McClay says the Government will continue to consult with a wide range of people and organisations on the overall direction of the tax administration modernisation programme.
“We recently launched the first two of a series of consultations with the documents, Making Tax Simpler – a Government green paper on tax administration and Better Digital Services,” he adds.
“More consultation papers are due later this year. So as work progresses on designing the new system we are constantly talking to those who will work with and use it to make sure we get the best results.”
McClay adds that the changes are not just to IT systems, but to policy, processes and the way people interact with Inland Revenue and well positions New Zealand to continue to be a world leader in tax administration.