Inland Revenue recently celebrated the success of a massive IT project in its digital transformation journey.

Effectively, the government department managed the transition of more than 19.7 million taxpayer accounts from one Inland Revenue computer system to another.

Revenue Minister Stuart Nash says the project involved staff and external agencies, including banks and various ICT companies.

“We are committed to ensuring our tax system is fair. That also requires us to ensure it is administered fairly through Inland Revenue's own processes,” says Nash.

“The department had to close its call centre and online presence over the Easter and ANZAC break to enable it to happen. A lot could have gone wrong. But instead, everything appears to have gone right.

Nash says every single taxpayer account for Income Tax and Working for Families was migrated from the legacy computer system to the new system, known as START, which Nash says involved a mind-boggling number of transactions.

“The system went live on Friday and has been tested in the real-world environment over the past few days. For example, this week it processed $33 million in Working for Families payments for 161,000 customers,” Nash says.

“The new system will continue to be tested in the coming weeks and extra staff have been brought in to handle customer questions. It is still early days and there are likely to be bumps along the way. However, IR assures me it has plans in place and will be ready to respond.

Some of the highlights of the ‘Business Transformation Release 3 project – the biggest changes to the tax system in two decades – include:

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

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

“Too many people have been paying the wrong secondary tax. IR's 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,” says Nash.

“It also 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 $860 million will be refunded straight into people's bank accounts.

Nash says effectively it's about bringing the system into one agile and converged process.

“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. Other systems administered by IR, including student loans, KiwiSaver and child support, will be migrated in the next two years,” Nash concludes.