I’ve been following the New Zealand Inland Revenue Department consultation process they’re currently running. The process aims to get public feedback on a raft of changes that the IRD is proposing to make interfacing with them much more efficient.

One of the suggested changes is one that will see online filing mandatory for all taxpayers. The theory goes that filling in paper forms is expensive, tends to create opportunity for errors and slows the processing time down significantly. Given these facts, and knowing as I do how easy online filing can be, it would seem a no brainer that this proposal would be accepted. Some of the comments on the IRD site however disagree. Read the following examples:

…As a budget advisor I meet people who are such poor taxpayers they can’t afford a landline let alone internet access and a computer. this would put another burden on the poor who already have to go and use a pay phone to call IRD because there are no local offices anymore.

Inland revinue [sic] assumes that all taxpayers have access to computers and access to decient [sic] broad band.

Thre [sic] are a significant number of peple [sic] who dont [sic].

To expect them to do their returns at an internet cafe with the dubious security involved and you [sic] information being laid out in the public domain for all to see is not good.

Apart from the questionable spelling and grammar of the comment, the thrust of it goes something like “not all people can do stuff online, therefore we shouldn’t make online mandatory until everyone can comply”. At face value this makes sense – perhaps online filing is a significant impediment to some. But then we need to think that nearly every library in New Zealand has free internet access that people can use, most council offices do also, add in the Inland revenue Offices themselves and rapidly we see that maybe this barrier isn’t quite as significant as people think.

The crux of this question is whether or not as a society we believe it appropriate to regulate in order to drive behavior and achieve a greater good. If making online filing mandatory really drives positive benefits for society (and I firmly believe it does) then perhaps it is acceptable to create a small degree of discomfort for those who lag behind the general populace on the adoption curve.

Keen to hear readers thoughts and examples of similar situations…

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

14 Comments
  • Hi Ben
    Great post and timely as many organisations and govt depts are struggling with this. I see two issues: one is whether or not we should make online filing of returns etc mandatory and despite being a strong advocate for the online channel, I’d say no. Tax is compulsory for all NZ’ers some of whom are working and in their 70s, some of whom don’t have internet access. Some who don’t have a computer and some who are computer illiterate. Unfair for those who still prefer manual and tax filing needs to be as easy as possible. The other issues is online processing can sometimes be soooo frustrating – that you end up calling the call centre etc for help which defeats the purpose. So the forms etc need to be easy peasy!
    More attention needs to be paid to this issue so web evangelists like myself are kept from making life a misery for those who prefer and know only the hand written word.
    Thanks Ben.

    • Siobhan – playing devil’s advocate for a minute (who me???) is your argument any different from those who suggest we need an IRD office in every little town so those who don’t like using telephones don’t have to?

      Yes there are elderly people who don’t want to do returns online, in the same way as there are numerically challenged people who don’t want to do their returns today – so what happens? People set up quick, low cost agencies that can do it for them – is it really the job of Government to provide for every possible use case? Or is it merely the role of Government to develop tools so that the vast majority of people can meet their obligations readily, and those who cannot will be provided a service by a third party?

  • I think that so long as free, publicly accessible terminals are made available (as a requirement) this makes sense. Perhaps even making terminals available in post shops is the way to go, since people will need to visit them to buy postage etc.

    On the other hand, people who live in the ass end of nowhere may find this difficult and might be unable to get the reliable net for a reasonable cost. Do we penalise them for choosing to live off the grid?

    I think that, regardless of these issues, if IRD are going to make online filing mandatory then they need to create a decent website. Their online system has serious usability issues.

    (sure I can work it out eventually, but there are lots of dubious design decisions that make no sense and make navigation more painful then necessary)

    • Joel, once again playing devil’s advocate, the people who live “in the ass end of nowhere” currently have to travel in order to vote, no one in society suggests we should send out wandering returning officers who collect the votes of those who chose to “opt out”.

      Why is this any different?

      (Oh and agree re site design for sure…)

      • People can choose not to vote (although they do have to be enrolled).

        I don’t know about the law regarding income tax returns. Do you become a criminal if you don’t file one? If so I feel is a big difference.

        In practice though, if anyone is making money, it requires some interaction with the rest of the world, so perhaps it shouldn’t be problem to require online submission of returns.

  • IMHO mandatory online paperless filing is a great idea and part of the INEVITABLE future which we should hurry toward rather than cower in fear of. It’s not a question of if, but when — the timing of the change will be driven by cost considerations more than anything else. Paper forms and the inevitable errors etc they end up with are just too expensive. Eventually some bright light in government will realize they have no choice. Full disclosure: i’m in the US not NZ and I believe we should have the same rule.

  • I think tax return submission is less about administrative convenience for IRD or “efficiency” than serving the public, AKA the paying customer.

    Just because we can force people to do things that might be socially beneficial (no smoking in prisons), generally I believe it better to work for the customer than force them to suit.

    The IRD should accept returns in the form (within reason) that best suits the payer.

    Hamish.

  • @benkepes Tried commenting – not sure if it got through. “Nice bait, Ben 😉 Can you point at examples (cont) http://www.twitlonger.com/show/2a773b

  • I say, go for it. For the people that don’t have access to the internet, they need to have the ability to fill out the necessary forms offline, and then they have two choices: a.) they go to their nearest public internet connection and enter the data online themselves; or b.) they post their forms to a tax agent who does it on their behalf.

    In doing this, the government accepts some responsibility to ensure that all NZ’ers have access to the internet—this could be at a local school or library.

  • @benkepes Very interesting Mr Kepes. Thanks so much.

  • Making filing taxes mandatory is actually the wrong end to start from. Time passes and 9x.y % will submit them online anyway. Pushing the 0,01% is like getting the extra 0,001% of uptime eg pointless or costly.

    In the middle of nowhere of the not so developed world, somewhere in Estonia, 92,4% of income tax declarations are filed electronically
    http://www.baltic-course.com/eng/finances/?doc=25665 . Just for fun…

    Now the question is that is part of public service efficiency enforcing the minority that doesn’t care, into a framework that will cause pain and emotions to everyone involved. Think not.

    There are significant other ways to make “interfacing more efficient” and electronic filing may be the one down the line. Everything starting from simple taxation and regulation, moving on to streamlined service by the officials, ending with the concept of ‘providing service’ not collecting taxes.

    Cynical as it may sound – the Tax and Customs Board of that same Estonia has been nominated 4th in 2005, 2nd in 2006, 3rd in 2007 and shortlisted in 2008 at the Estonian Customer Service Event of the Year.

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