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Using digital services

What should the approach be to customers who impose a cost on everyone by not using digital services?

Some customers could move to digital services, but will choose not to

These customers will not be subject to the constraints preventing adoption of digital services set out elsewhere but for whatever reason, have chosen not to move to digital services.

Once Inland Revenue has developed a comprehensive portfolio of high-quality digital services, the majority of customers who can adopt those services are, over time expected to “vote with their feet” and move to digital services. The category of customers who can adopt those services but who choose not to is therefore expected to be small, and will diminish over time.

It is likely that digital and non-digital services will sit alongside each other for some time, with the choice of channel being largely left to customers.

The cost of delivering tax administration through digital services is typically lower than by non-digital equivalents. Because tax administration is funded out of government revenue, everyone bears the cost.  Everyone benefits by having the most efficient tax administration system.  Accordingly, allowing some customers to impose a cost on wider society because of a choice they made, rather than out of necessity would need careful consideration. 

Do you agree that when some people have a digital service option available but by not using it are imposing a cost on everyone, they should be supported, encouraged and, if necessary, ultimately required to use digital services?

Comments

AJK
These comments display a gross ignorance of many of my clients in regional areas. "Those who choose not to use (services available)" - how rude! Have you not read the information you collect about the majority of businesses being small businesses? Just because an internet service may be "available" physically doesn't mean it can actually be afforded nor accessed on a timely basis - paying hundreds of dollars a month for a part-time service is often not an economic choice, and to penalise these people for using a more efficient and quick method - no! Further, we do not yet have a reliable IRD system, but one that overloads regularly, especially when needed. I now have clients who have given up filing returns via the web as the internet service is unreliable and the IRD service is worse - they are now reverting to paying bills online but filing returns the good old fashioned paper way. They are busy people - they and we do not have all the time in the world to constantly be inputting data into your systems when we should be working on our own businesses first!! The idea is tax SIMPLIFICATION not the opposite.

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1 year ago
JT
I totally agree with you - a partime business doesnt have enough income to justify paying for online accounting services that are not needed

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1 year ago
George Spark
Very few people would have "genuine reasons" not to file digitally. With genuine reasons I mean for example being physically unable to use a computer due to disability or similar. Arguments like that they don't want their data to be in a computer won't hold sway, as no matter how they file, the data will eventually end up in a computer. So after giving plenty of notice, and making the service extremely easy to use, and perhaps making pen-input tablets with traditional forms on the screen available at Post Shops or bank branches or similar, that would be it. Or maybe a phone-based service can be used like the current system, asking people to "speak" into a form. But ultimately, if with all these services people still want to file paper forms, there should probably be a surcharge of some kind, mainly as a discouragement. If the new system is really simple, presumably accountants could offer a very basic, low cost fixed-fee service to file tax returns for people with uncomplicated taxes.

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1 year ago
Kevin
Let them have their choice but discount the channel you want people to use reflecting the lower administration costs. If it is a worthwhile saving people will move if they can.

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1 year ago
C Waters
How can you have a single tick box to what is two or three separate questions? If the internet is not easily available you can't make it compulsory. Once identically priced and speeded internet is available to EVERY possible location throughout NZ then you can request its use. Until then you can't. And once available who is going to train everyone in how to use the specified programmes. And how are these programmes going to interact with every computer and internet connection in NZ. Getting a new laptop resulted in more than 50 hours of my time in getting Windows 8.0 to do what XP had achieved simply for years. Even all of the printer drivers had to be downloaded again.

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1 year ago
Dwayne
No you can't. Deciding who can and can't afford to submit tax online on IRD's schedule is only going to increase compliance costs for those that can't do monthly returns efficiently. For people like myself its easier to de-register than to spend more time doing tax. For others it might just mean closing their small business or moving it under the table. The whole point was supposed to be making tax easier for people who its convenient for, not deciding who is going to fit the new system whether they like it or not... I suspect that the most efficient result is to let people give IRD some estimates as and when they can, and IRD could simply recommend what advance tax payments would be safe. Even with the fastest internet in the world and the most computer literate population, there will be heaps of people who are not familiar with accounting software or don't have time/money to update accounting records on such a regular basis. I hope the arrogant attitude embodied by this loaded question does not reflect a culture in IRD that compliance costs are equivalent to extra taxes being borne by users. Tax payers are entrusting their money to IRD so that it can benefit the whole country, and if this process can be made more efficient then IRD should be GIVING BACK those efficiency gains to the tax payers! Seriously. If it costs the government less, then help the people afford to become more efficient.

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1 year ago
Glenn
If digital services are available but taxpayers choose not to use them, either they have been poorly designed or their benefits to the user have not been adequately communicated. Either way, the onus is on IRD to provide the incentive, not a stick, to encourage people to transition. IRD has an incentive for taxpayers to use digital (lower costs, better collection). To provide IRD with a stick to force taxpayers to transition to digital removes the incentive for IRD management to ensure the digital service is as good as it could be (effectiveness, efficiency, ease of use, lowest cost to the economy). So advocate digital be promoted through utilisation of its potential benefits. There is already too much emphasis on penalties within the tax regime, rather than on system improvement to reduce barriers to compliance.

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1 year ago
peter fitzsimons
This sounds like coercion.

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1 year ago
Chris Peace
I think it silly to imply non-users of digital services should be penalised. If IRD gets it right, users will be benefited by digital services and non-users will not benefit. That should be an adequate "nudge" for some non-users and perhaps create opportunity for those who cannot change due to the high cost or lack of broadband.

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1 year ago
Ralph McCleery
Disagree with this 100%. It would be arrogant of the government to think along these line and not expect a backlash if pursued!

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1 year ago
Neil Walbran
I prefer the approach of providing encouragement via fees for those who impose costs on others. They could have very good reasons for not wanting to use digital services. And sometimes those reasons could be unavoidable. But if they are imposing costs on others then they should face a fee that reflects those costs.

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1 year ago
Paul
There should be no penalty for users who do not use the "Direct Information Exchange" facility between accounting software packages and IRD because many businesses (especially small businesses) don't use specific accounting software, they simply use spreadsheets and other inexpensive options.

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1 year ago
Nigel
IRD should suck up the costs of small business not using their clunky digital solutions. If the IRD's solution was great everyone would jump on it. ALSO Please bring back 'Postage Paid' envelopes. It is the IRD's job to collect tax, not small business and I don't see why I should also pay their postage.

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1 year ago
Dennis Brown
Absolutely not! Yes to encouragement and educating, no to coercion and, absolutely not to forcing digital on everyone or punishing those that don't want it. You are public servants. Your role is to serve the public. If a section of the public you are here to serve prefers non-digital for whatever reason, accept it. Those taxpayers are not obliged to serve you and your preferences.

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1 year ago
wendy
This is an appalling suggestion. Who came up with this idea? Is it the case now that every contact we have with our government departments is being costed and we will have a file that quantifies we should pay more tax because it costs the government more to deal with us? How do you quantify that? Big firms, companies, large foreign companies, will use up more government time, will they pay more? Or will the government let them off depending on how much tax they pay? Or what their tax "deal" is. This is not simpler this is seriously more complicated and screwing the whole tax idea. It is also penalising the person who does not want to adopt digital and why should people be compelled to do this? This is an outrageous.

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1 year ago
maygray
This question illustrates the attitude behind this process. Government cost cutting, user pays mentality. This is not appropriate for a tax system also one that seemingly does not have any controls we are in danger of creating a monster. Lets turn it around and come from the perspective of how do we create a user-friendly, customer oriented tax system that people love to have contact with and which they can have confidence in to treat them properly, look after their private information as if it were their own, has proper controls and will not endanger or expose them or misuse their information, and will assist them if they cannot conform.

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1 year ago
Sharon Nolan
Those taxpayers who wish to use digital services but not using accounting software should be catered for.

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1 year ago
Ed Lusty
There should never be any additional costs for manually filing returns or having a manual relationship with IRD. If IRD's digital systems are any good then people will want to migrate to them, thus reducing the number of people using manual. If IRD's digital systems are not so good then people will migrate away from them, even if they have the capability. The voluntary uptake of digital services should be an important KPI as it shows if IRD is providing a service that it's customer desire.

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1 year ago
Heather King
I think customers should have the opportunity to use digital services, and perhaps a slight discount? or something to encourage people to do so. However, those who cannot (or will not) use digital services should not be made a pariah.

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1 year ago
Toni
Good God! Stop blaming people for not being able to, or not choosing to, use digital services. The Government forces us through its mechanisms. laws etc to pay taxes. Using and being forced to use digital services will make that easier. The Government takes our money off us, and so it can use some of that money to pay for the extraction of it from the public. Don't penalise and shame people who choose not to use digital services for whatever reason. And don't get us to blame them either. IRD should take responsibility for what its doing.

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1 year ago
JT
I agree AJK - some part time small businesses cannot afford to pay for online accounting services, the amount of income received dosnt justify spending that manoey on something that can easily be done for free another way.

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1 year ago
AB
No. Definitely not. As the population changes overtime with more tech savvy people the abstainers will reduce over time. That just leaves you with two camps - fiscally constrained (lets not put more stress on those people) and the Big Brother Is Watching You freakout brigade (lets not spend any money bothering to win them over)

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1 year ago
Annie Hill
Yes, they should be encouraged and supported. No, they should not be required. It's a free country, when all's said and done and people have every right to run their lives away from the Internet, if that is what they wish.

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1 year ago
Pat McIntosh
I do not think there should be any penalty for NOT choosing to use digital services. Freedom of choice and personal privacy and security are important.

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1 year ago
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