March 29, 2016 3:00pm by David Farrar

A quarter of IRD jobs to go

Inland Revenue expects to cut about 1500 jobs between 2018 and 2021, deputy commissioner of change Greg James says.

James revealed the job-reduction target releasing a previously-confidential business case into the department’s Business Transformation (BT) modernisation programme.

The job losses would mean the department’s workforce shrunk by 25 to 30 per cent, he said.

That will be hard for those affected, but if it is as a result of a tax system which is easier for taxpayers to navigate, then it is a good thing.

The BT project will see Inland Revenue replace its computer systems and collect tax more accurately through the year.

James signalled major changes were likely to be announced within weeks for provisional tax, which is widely disliked by small businesses.

Company tax is expected to move to more of a “pay-as-you-go” regime.

Great.

The BT programme should mean fewer, smaller end-of-year tax refunds and debts.

The business case forecast the benefits of the project to the Crown would value between $4.45b and $7.65b by 2024, coming from reduced tax avoidance, lower debt write-offs and cost savings.

Inland Revenue expects taxpayers to get an additional $1.2b to $2b benefit through reduced compliance costs. The average business could expect to save 30 hours a year managing their tax, James said.

if it is done well, this should be a great end result. But the trick is to do it well.