ATO preps 'watershed' IT release

The Australian Taxation Office is moving ahead with the mammoth income tax component of its Change Program starting tomorrow.

"This is a watershed decision to replace our National Taxpayer System that has worked well since the mid 1970's with a new integrated core processing system," the agency said on its site. The scale was "enormous", even when compared to global system replacements, it said.

Many systems would be unavailable from noon today (Friday) until 6:00pm Tuesday, with little to no access to information through portals, even for staff. There would be delays processing income tax returns, as those filed would be stockpiled.

The implementation was not expected to go without problems.

"History tells us we can expect some teething issues after we deploy a new system of this magnitude. We will begin by processing a small number of forms in the new system, gradually increasing as we bed in the system. We are putting in place extensive arrangements for managing the problems that will arise. Nevertheless, there will be impacts on our service standards which we will take all possible steps to minimise," the agency said.

The fringe benefit tax component had suffered from a lack of prior testing, according to a recent audit report of the program, which had led to some problems with implementation.

Research director Sam Higgins from analyst Longhaus believed that issues would likely be related to data quality. "Often that's an area which gets less attention than it should," he said.

In the short term, he thought issues would be light, while as time progressed, the data problems would arise, even if the taxation office had spent enough on managing the quality.

"You only have to get one widow on A Current Affair asking why the tax office was asking for money from her dead husband to involve a whole lot of politicians," he said.