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Living in a digital world

Digital technology

Digital services are evolving fast.  The internet and mobile phone have transformed communication, business processes and social lifestyle.

Digital technology is a way to transfer, process, record, generate and display information electronically.   It includes but is not limited to internet-enabled systems, email, text, apps and social media.  This consultation uses “digital” as shorthand for any electronically enabled technology in whatever form that might take today and in the future.

New Zealanders are embracing the change

Internet use in New Zealand households is relatively high. According to the 2013 Census, 77% of households have access to the internet. Other research indicates that New Zealanders who use the internet use it extensively:

  • 81% check emails at least daily;

  • 64% pay bills online at least monthly;

  • 52% go online at least monthly to look for travel information.

 

Increasing electronic transactions in New Zealand

Industry sources indicate that approximately two-thirds of total spending in New Zealand is done electronically on eftpos and credit cards.  This is significantly higher that the international average.  Just over 32% of worldwide consumer retail spending was card-based, according to 2012 research by Moody's Analytics.

Increasing electronic transactions in New Zealand

Inland Revenue already offers a range of digital services, including website, mobile apps, text, software-enabled filing, email, social media, and voice biometrics.  Customer satisfaction with on-line channels is relatively high. There is already significant use of digital services to meet tax obligations and access social policy entitlements administered by Inland Revenue.

The majority of payments are made via digital channels

The proportion of electronic payments Inland Revenue received in December 2014 was 86%, which shows a 19% increase compared to December 2013.  A significant contributor to this has been the removal of a previous rule which provided a timing advantage to those who paid by cheque.

 

The majority of payments are made via digital channels

 

 

 

The majority of payments are made via digital channels

Possible developments for the tax administration system

The digital technology already exists outside the tax administration system which could transform the way individuals, families and businesses interact with Inland Revenue. For example, digital technology could be used to:

  • allow customers to access services and information faster and at a time that is convenient for them, through whatever devices might be appropriate for that type of interaction;

  • allow customers to receive immediate confirmation that their obligation to provide information or make a payment has been discharged;

  • provide information already held by Inland Revenue – for example, from banks, on returns so businesses and individuals don’t have to supply it;

  • share information from other government agencies so businesses and individuals don’t have to supply it again; 

  • integrate tax processes into normal “life” processes.  For example, a migrant could receive an IRD number at the same time they were granted a work visa;

  • integrate tax interactions into business software so businesses don’t have to provide information separately for their tax requirements. For example, an employer could meet their PAYE obligations as part of paying wages through payroll software;

  • proactively inform customers of obligations or entitlements and inform customers about services that might be useful to them;

  • provide a “real time” view of a customer’s tax and related social policy “account information”;

  • enable shortfall payments and debt to be collected from subsequent income periods.

 

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