Annual Report 2005
Statement of responsibility
In terms of the Public Finance Act 1989 I am responsible, as Chief Executive of Inland Revenue, for the preparation of the department’s financial statements and statements of service performance, and for the judgements made in them.
I have the responsibility for establishing a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting.
In my opinion, these financial statements fairly reflect the financial position and operations of the department for the year ended 30 June 2005.
David Butler
Chief Executive and Commissioner of Inland Revenue
30 September 2005
Countersigned by:
Vanessa Johnson
Acting Chief Financial Officer
30 September 2005
Inland Revenue's Charter
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Our Charter commitments
Our Charter has been in place since March 2001. It is our commitment to making sure that we have an effective relationship with the community. It sets out our aspirations for providing advice and information, acting consistently, and guarding privacy and confidentiality. By continuing to improve the standard of our service and observing the safeguards in our Charter, we will strengthen community confidence in the tax system. This is reinforced by customers having the opportunity to question us through our Complaints Management Service.
Many of our important initiatives and ongoing activities are detailed elsewhere in this report. In the following sections we outline how these initiatives and activities support our Charter.
How we will work with you
We regularly survey people who have contacted Inland Revenue and ask them about the service they received and whether they have suggestions for improvement. Over recent years we have sustained consistently high levels of customer satisfaction with our service, and this year we achieved an overall customer satisfaction rating of 85% 1.
Most of our customers contact us through our telephone services. We achieved a customer satisfaction rating of 86% from our call centre customers, while 96% of tax agents who called us were satisfied with the service they received. In addition, 82% of customers considered their questions to be fully resolved, requiring no follow-up action.
We continued to reach out to communities during 2004–05. This year we introduced a translation service for our child support customers who do not speak English as a first language.
We also met groups or individuals and advised them on tax and social policy programme issues. The hours spent on advisory services rose by 5% over last year, as additional work was done to inform people about Working for Families. Business advisory visits were also above forecast, as new business taxpayers are increasingly becoming aware of the professional service we provide. The customer satisfaction rating for our advisory work was 97%, the same as last year.
Our correspondence volumes increased again this year, and we were pleased that we achieved our correspondence timeliness performance standards while meeting other high priority demands. 88% of general correspondence was answered within three weeks, and 98% within six weeks.
Reliable advice and information
We are committed to making sure our people have the skills and knowledge they need to provide reliable and correct tax information and advice. We continued to develop our internal tax technical training capability and improved its links with our human resources structure.
Every six months we measure the change in our people’s technical competency rating. Their competency rating has increased by 9% between June 2004 and June 2005.
Figure 57 - Annual gain achieved in staff competency 2
We also actively encourage our people to take external courses that will enhance their technical capability. Five of our staff have been selected to start the University of Auckland’s Master of Tax extramural programme and we are looking at a partnership with a New Zealand university to offer our people an undergraduate degree in 2007.
A recent innovation to enhance the consistency of the information we provide is through recording calls to our six call centres. By monitoring calls we can make sure that we are providing consistent and accurate information as well as helping to design better customer service methods.
In all cases we aim to give our customers an answer that is correct, complete, clear, timely and appropriately referenced. We achieved a result of 86% for our child support customers and 80% for our other customers.
We have continued to implement new and better ways to provide advice and information. For business users of our services we have:
- appointed a manager specifically to liaise with small- and medium-sized businesses
- developed a trans-Tasman section of our website and worked with the Australian Taxation Office to provide information for people in either country who wish to do business in the other country
- worked with the Companies Office to streamline the issue of IRD numbers by linking this directly to the process of registering a new company.
Confidentiality and privacy
It is vital that taxpayers and the community have confidence in us and our ability to keep their personal information confidential. Our training programme on integrity and ethics, Judge for Yourself, and our Code of Conduct continue to focus our people on these obligations.
When new staff join Inland Revenue they attend the Judge for Yourself programme as part of their induction. Staff who have taken part in the programme have given us very positive feedback. We will continue to use it over the coming year and also look for new initiatives.
We also acted on breaches of secrecy and unauthorised access to taxpayer information. We constantly monitor our computer systems and have safeguards to ensure that staff access to taxpayer data is for business reasons only.
Consistency and equity
To maintain the integrity of the tax system, we need to provide taxpayers and the community with a consistent interpretation of the law. We also need to apply it in a way that considers the extent of an individual’s circumstances.
Since the changes to debt and hardship rules in 2002, we have been able to approach debt situations with greater flexibility. For example, where an instalment arrangement has been put into place, we can make sure that this is realistic and sustainable.
We show our commitment to achieving consistency and equity by our efforts to see that people receive their correct family support entitlement. Because they can easily receive an over- or under-payment when their circumstances change, we take proactive steps (such as checking actual income against predicted earnings) to avoid debt being incurred. In 2004–05 78% were not overpaid, compared to 72% in the previous year.
Your right to question us
Taxpayers and the community need a mechanism to question our decisions and resolve disagreements. This maintains confidence in the tax administration and helps to maintain high levels of voluntary compliance. People have a range of options for having their disputes resolved, which includes contacting:
- our Complaints Management Service, if they have not been able to resolve a complaint with the person handling their enquiry
- the Minister, the Commissioner of Inland Revenue, or other authorities dealing with complaints or disputes.
These two services are being integrated into a single unit in our Policy Advice Division to improve the feedback we receive through complaints and to link into our policy processes.
Complaints Management Service
Our complaints process has now been in place for four years. Each year the number of complaints dealt with has grown steadily, and this is a reflection of how the service has developed since its inception. It is now widely publicised in our publications and on our website, and this year our new-look website made it easier for customers to register complaints online. In 2004–05 there were 5,923 complaints, compared to 4,915 last year.
Despite the increased number of complaints registered, there has been little change in the proportion of each type of complaint. 47% of complaints were about Inland Revenue procedures, a similar level to last year (48%). Complaints about correspondence decreased by 2% to 14%, while complaints about our phone services increased by 2% to 7%.
Figure 58 – Reason for complaint
In 2004–05 we completed our first full year of recording whether the complaint was upheld. We determined 70% of the complaints were valid or partially valid.
Figure 59 – Percentage of cases upheld
We also recognise the importance that complaints have for giving us feedback about the way we provide our services. Analysis of complaints in 2004–05 led to improvements in processes, particularly to eliminate contradictory information in forms and improvements to the accessibility of information that taxpayers found to be important.
Approaches to the Minister, Commissioner and other authorities
Our Ministerial Services team manages matters raised with the Minister, the Commissioner of Inland Revenue, Ombudsmen, the Privacy Commissioner and the Human Rights Commissioner. Over the 2004–05 year the team dealt with 2,332 contacts.
Ministerial Services has tight deadlines for responding to Ministers’ and the Commissioner’s correspondence. All correspondence has to be resolved within ten working days. This year 98.4% of Ministerial correspondence and 98.5% of the Commissioner’s correspondence (up by 8.2% on last year) was completed in that timeframe.
Income tax was the main issue raised in correspondence (57%). Other issues related to child support (25%), GST (10%), family assistance (4%), and student loans (4%).
Ombudsmen and Privacy Act complaints
The Office of the Ombudsmen and the Privacy Commissioner are independent review authorities that undertake investigations for taxpayers who have been unable to resolve their issues with Inland Revenue. Ministerial Services assists by providing them with impartial information about the cases they are investigating.
We received 96 new Ombudsmen cases during the year, 15 of which are still incomplete. A total of 92 cases were fully resolved during the year (including 11 cases from the previous year). Of these, 60 were informal enquiries and were resolved informally by a telephone call. In five cases the complaints were sustained, and one was partly sustained.
We received ten new privacy cases during the year, four of which are still incomplete. A total of 11 cases were fully resolved during the year, with only one case being sustained.
1 The margin of error for these surveys is + or - 2%
2 Competency is measured each year for the staff at the time. Because of staff turnover the gain in competency reflects the training given to both new and existing staff.
Date published: 11 Oct 2005
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