Colorado-based Fast Enterprises has been named preferred supplier to design and supply the software that will underpin New Zealand's new tax and social policy administration system.
The deal is part of a transformation, already two years in the planning, that was forecast to cost around NZ$1.5 billion over 10 years.
"Modernising New Zealand's tax system is high on the government's business growth agenda," Inland Revenue Department deputy commissioner of change Greg James said.
"Importantly, it will allow us to link our systems across government and the private sector, fit revenue processes seamlessly into customers' lives, and use information more intelligently."
Revenue Minister Todd McClay said key individuals from Fast Enterprises were instrumental in building IRD's current software, FIRST.
Selecting Fast would also bring the delivery time frame down from 10 years to under eight, and see the cost near the bottom end of the forecast -- at around NZ$1.3 billion, he said.
"I will be working with Inland Revenue to find further efficiencies and expect the cost could be as low as NZ$1 billion," McClay said.
Selecting Fast was a significant step towards a "simpler, more effective tax system", James said.
Crucially, it would also make introducing policy changes easier and more cost effective for the government, which has already had to defer new policies due to Inland Revenue's inflexible, 25-year-old legacy environment.
James said he expected work would begin in July.
"Initial tasks will be the detailed design of new streamlined digital services for PAYE and GST information collection," he said.
"Ultimately, the new system will run the core tax and social policy administration. It will progressively replace our existing FIRST system."
James said Fast was selected after it demonstrated how its new system would deal with complex customer scenarios, and after seeing its software operating at other tax agencies.
"Fast will supply a fully integrated tax solution, rather than building a system from the ground up," James said.
Fast reportedly shaded Oracle and SAP in the selection.