Media exacerbated tax return delays: ATO

The commissioner of taxation believes that the Australian Taxation Office's (ATO) project to replace the agency's decades-old core processing technology could be considered a "success story", despite the new system causing a delay in processing tax assessments last April.

The tax office last year implemented a new integrated core processing system, which attracted mainstream media attention when system problems caused a delay in processing 1 million tax assessments. This also caused a delay in refunds for eligible taxpayers.

Last Friday, tax commissioner Michael D'Ascenzo told a federal government Joint Committee of Public Accounts and Audit (JCPAA) that he believed the recently completed project was a "success story" considering the level of complexity involved in replacing the decades-old technology used to process the country's tax returns.

"The new system is an achievement considering its complexity," D'Ascenzo said. "People don't appreciate the scale of changes that were made."

He said last April's delays were exacerbated by the agency quickly ramping up production on the new system, and the huge media scrutiny of the system problems, which prompted more taxpayers to complain and add to the agency's workload.

"It was exacerbated by some minor issues but it was just enough to break the camel's back."

ATO second commissioner David Butler told the joint committee that out of the 22 million assessments that have been processed by the new system, only 2000 were affected by a "calculation error".

He described the result as "very accurate", but admitted there were always going to be issues with the system.

"For a system as complex as this it's impossible to say there are no issues to worry about. It's more important to know about what the issues are and to do something about them."

In a submission to the committee, the ATO said it has commenced re-engineering business processes to optimise system capability.