ATO income tax system upgrade set to go ahead

The Australian Tax Office's (ATO) technical deployment of the nation's new income tax IT system looks set to go ahead as scheduled from Friday January 22.

The upgrade has been described by the ATO's second commissioner David Butler, as the biggest in the agency's history and will turn off the national tax payer system that has been used since the early 1970s, the National Taxpayer System (NTS).

In its place will be a new income tax processing system that extends the ATO's "integrated core processing (ICP) system to income tax and higher education loan accounts (HELA)".

The ATO has been advising taxpayers and tax practitioners to lodge income tax returns early as several systems will be offline between January 22nd and the 27th.

In late December, the ATO said it would only proceed with the upgrade if it was confident it is ready.

"There are some areas to focus on before we implement the new system. We will carefully track our progress between now and the end of January. We will only implement the new system when we are confident it is ready," a statement on the ATO website reads.

"The final decision will not be taken on this until the end of January 2010. If we are not confident of a successful deployment we will defer the new system until we are sure it can be implemented with less disruption."

However, an ATO spokesperson has told Computerworld there have been no changes to the existing schedule, indicating the upgrade would proceed as planned.

The upgrade is part of the agency's broader Change Program, which aims to migrate it away from more than 180 legacy and paper-based systems to a single, integrated core IT system.

The program has, however, been hit by delays and budget blowouts while forcing the agency to publicly acknowledge it was under "extraordinary pressure".

The ATO's annual report, submitted in October last year revealed the Change Program is high risk and mostly responsible for the office’s budget overspend last financial year.

The program commenced in December 2004 at an estimated cost of $350-450 million and was set to be completed by the end of 2007. However, the budget has blown out to double the original figure, hitting close to $750 million.

In September, the ATO's Change Program Steering Committee approved plans for the agency to commence processing income tax returns on the new system from 1 February, 2010.

The latest date for completion for the project is July 2010 with business activity statements (BAS) excise and other remaining tax products to be "deployed onto the integrated core processing platform". A new portal for businesses, tax agents and BAS service providers will also be launched at this time.

In October last year the ATO also accepted the recommendations from the Australian National Audit Office (ANAO) after the latter conducted a performance audit of the Change Program.

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