PAYE system to be revamped

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Revenue Minister, Todd McClay, has said a PAYE system overhaul will be one of the first things “off the blocks” as part of Inland Revenue’s $1.5billion computer system upgrade.

In a speech to the NZ Payroll Practitioners’ Association Annual Conference, McClay said there were a number of problems with the Employer Monthly Schedule which is central to the PAYE system.

“A fundamental issue with it is that it is labour-intensive, often requiring double-handling and repeat contacts from IRD, thus making it a significant burden on employers,” he told the conference attendees. “…that makes the EMS a prime candidate for a makeover. And I’m really talking about an extreme makeover.”

McClay said that by renovating the system, so it can provide information digitally to the IRD, it would “greatly improve” its efficiency and reduce compliance costs for employers.

“We’d achieve this through a much greater reliance on electronic media and a system which allows accurate, validated information from employers at the first interaction providing near real time confirmation and improved status reporting.

Wide consultation on the project would begin soon with payroll providers and software developers key target groups for consultation.

A range of other initiatives yet to be announced would be rolled out over the decade in four stages.

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