Inland Revenue's deputy commissioner for change talks about transformation project

“We’re in a paradigm shift. We need help.”

Inland Revenue's deputy commissioner for change, Greg James, summed up in these few words the focus of the department’s multi-year transformation project: “We’re in a paradigm shift. We need help.”

There were 120 attendees at this week’s IRD Transformation Briefing in Wellington – 40 at an earlier Auckland briefing – where Revenue Minister Todd McClay, Commissioner Naomi Ferguson and James spelt out Inland Revenue’s plans to simplify the tax system over the next decade, with a massive ICT – possibly $1.5 billion – investment underpinning the changes.

Consultation was the word du jour. Ten years of it, the Minister said: “The first stage will be simplifying the tax product, reducing compliance costs by letting people engage online. There will be opportunities for New Zealand ICT companies over the next 10 years.”

Ferguson said 750,000 people are already using the department's voice ID, “one of the biggest [usages] in Australasia”.

James spoke at length, noting that with the speed of change globally, New Zealand couldn’t continue to rely on old systems and processes. “We’ll challenge every single process.”

He said Inland Revenue has sent teams to other tax jurisdictions but “no two tax systems are the same, so we will ‘co-design’ [the changes] with our stakeholders". He said he will break it into smaller pieces to manage the risk.

Expressions of interest for the stage one design would be sought on GETS this week.

“Over the next nine to 12 months we will go to market for other things.” These include testing services (he says an announcement on the successful tenderer will be made “very soon”), development services, design and build of mobile applications, and a website rebuild.

James stressed that there is no predetermined technology. Rather, there will be “enablers further down the journey”. He said Inland Revenue won’t sink money into technology that might not be of use later on.

James said Inland Revenue would design with all-of-government in mind. The department supported government plans to join things up and felt that, generally, it would be in a lead situation.

“It will be 30-plus years before it [another transformation of the tax system] can be done again,” he said.

An accompanying summary document given to attendees shows the transformation will be separated into a number of stages and delivered over several years. “To mitigate some of the risks of a large-scale transformation programme, it is currently envisaged that each stage will consist of a number of smaller, discrete projects,” the document stated.

“For this initial procurement, Inland Revenue proposes a four-stage competitive procurement process to identify preferred transformation service provider(s).” The stages are: expression of interest, competitive dialogue, request for proposal, and negotiation of contractual documents. These are collectively estimated to take up to 10 months.

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