Monday, February 15, 2010

Still waiting for your tax return?

It could be because the Tax Office computer has been off

Things will start to look up for as many as half a million taxpayers from today.

They're caught in a backlog that began on the Australia Day long weekend when the Tax Office took the unusual step of turning off the aging computer system that processes tax returns and transferring all 27 million taxpayer records and 280 million forms to a new one.

Until days ago scarcely a return had been processed since.

Some test runs have made a dent the backlog of 705,000 unprocessed returns and 111,000 were to have been processed over the weekend.

If all works well when the new system is run at full speed from this morning most of the backlog will be cleared by the end of the month.

But some taxpayers will wait longer... Second Commissioner David Butler told a Senate committee Wednesday it would take some time to properly link the Tax Office and CentreLink databases. Taxpayers dealing with the Child Support Agency and students claiming youth allowance will also experience problems.

Asked why the Tax Office couldn't continue to run the old system while it set up the new one Mr Butler said the two would get out of sync. "We had to essentially turn the old system off, move all the data to the new one and then start processing on the new system going forward," he told the Committee. The Tax Office would consider paying interest on late returns.

The $434 million project is 50 per cent over budget and behind time. Originally due for completion in late 2009, then on January 27, then on February 8, it needs to be operating reliably before March when the next wave of company tax returns arrive.

The Auditor General found the original timetable "ambitious and, in hindsight, optimistic."

Governments had repeatedly loaded more work onto new the system, including the administration of Labor's First Home Saver Accounts and the Coalition's changes to superannuation.

The new system will replace more than 180 old computer systems, some more than 3 decades old.

It will form the backbone of the new pre-filled internet tax return service and the optional government calculated automatic tax returns recommended in the Henry Tax Review.

Published in today's SMH  and Age 

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