Annual Report 2006: Part three - Key strategies

Providing information and support

New Zealand operates a self-assessment system (where people calculate the tax they have to pay) that requires a high level of voluntary compliance (where people meet obligations of their own accord). One of our main approaches to maintaining voluntary compliance is to make sure that our customers have access to easy-to-use and convenient services and information. This helps them to understand what they need to do to meet their obligations and/or receive their entitlements. We take a broad approach to the design and delivery of these services, ranging from:

• understanding customers' requirements to design services and products that will meet those requirements
• making a wide range of information and services available through electronic channels
• providing customer assistance either by telephone or face-to-face and providing specific information on tax issues.

Understanding our customers

This year we have continued to identify and use information about our customers' requirements to design services appropriate to meet them. Two examples of using this approach are small and medium enterprises and working with tax agents.

Small and medium enterprises

In August 2005, we established a Small and Medium Enterprise (SME) team to strengthen relationships with the business community, other government departments and related stakeholders in the SME sector (such as the New Zealand Centre for SME Research). The SME team works:

• across Inland Revenue as champions for SMEs, ensuring that the "voice of small business" is heard and considered. Reaction to the initiative, which follows the recommendations from the government's Small Business Advisory Group, has been positive.
• with other government departments to use their experience and knowledge of the SME sector and to provide seamless delivery across the sector. For example, we collaborated with New Zealand Trade and Enterprise (NZTE) in the redevelopment of www.biz.org.nz a website (administered by NZTE) that provides information to SMEs about how services provided by the government will help them run their businesses better.

Tax agents

We also recognise the key role that tax agents have in maintaining an effective tax administration. We have a very constructive and positive relationship with agents and the New Zealand Institute of Chartered Accountants and we greatly value this. We have identified a number of initiatives to enhance the relationships we have with tax agents and their professional bodies. These initiatives will provide tax agents with the ongoing capability to work with us to ensure their clients are compliant with the tax laws. This reflects our increased focus on outstanding debt and returns for tax agents and their clients.

Tax agents continue to appreciate the service we give them - 92% of tax agents surveyed this year rated our service as good or very good.

Electronic service delivery

During the year we continued to introduce electronic-based services that are easy and convenient for our customers to use and deliver significant benefits for customers, the Government and our people. The development of our electronic services aligns with the governments development goal of "networks and internet technologies will be integral to the delivery of government information, services and processes"¹⁹.

Our success in delivering electronic services was reflected in our main website (www.ird.govt.nz) winning a Hitwise Online Performance Award for being the number one website in the "Government - National" category for 2005 and also the best government or community website in the 2006 NetGuide People's Choice awards.

During 2005-06, we:

• experienced considerable growth in the number of visits to our web sites
• introduced our e-business strategy that provides a common direction and focus for development of e-business across Inland Revenue
• introduced our youth website (www.whatstax.govt.nz) to provide tax information to young people.

Summary of key operations

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Supporting our younger customers

An increasing proportion of younger customers are registered with us. It is sensible for us to build positive relationships with them at an early stage. Our approach to achieve this is by providing information and support, so they are aware of their entitlements and obligations. We continue to be an active supporter of the Enterprise New Zealand Trust's "Financial Education" programmes that are available to year nine to 13 students throughout New Zealand. The programme modules aim to develop financial literacy in students and give them the ability to make informed judgements about the use and management of money. To support student loan borrowers, Inland Revenue's main website has a dedicated section for student loan issues. This provides general information and forms, and electronic tools to help borrowers manage their student loan repayments. This year, Inland Revenue developed an innovative website called "What's Tax?" aimed at young people starting their first job. The site (www.whatstax.govt.nz) aims to give young people a resource to help them understand their basic tax obligations when they start work. We believe that providing a resource using language schoolleavers can relate to, through a website designed specifically to appeal to them, creates a positive relationship with Inland Revenue from the start. Educating young people and encouraging voluntary compliance is a strong message we want to send to the community.

This year we continued to develop "self-service" products for tax agents. We introduced a real time, online service that lets tax agents link clients to their agency record. In addition, tax agents accessed accounts 3.4 million times during the year using our Look at Account Information service. This had a positive flow-on effect of reducing telephone calls to our tax agents' 0800 line. Further proposed services include providing agents with direct access to their client list and access to a variety of client information such as return and account details.

Providing customer assistance

In delivering customer assistance, we seek to build strong relationships with our customers and the community. In the long-term, we want to drive down the need for repeat customer contacts by increasing the value of each contact-without reducing compliance with the laws we administer.

We have made considerable and ongoing efforts to raise our capability to provide more effective customer assistance, including:

• investing in new telecommunications technology
• raising our people's skills and knowledge
• building strong community relationships.

Over 2005-06, we further enhanced our telecommunications capability by introducing a new platform that provides a consistent customer experience and can also deliver further internal efficiencies.

We responded to approximately 8.2 million contacts this year. These contacts occurred mainly during peak tax periods. However, a large number of contacts also related to phase two of Working for Families and the changes to student loan legislation. We responded to this demand primarily through our call centres, although we experienced an increase in counter enquiries and advisories. Despite the large volume of contacts we received, we were able to achieve a high level of customer satisfaction with our services (79%).

Child support telephone calls are answered by specialist staff in our regional and branch offices, not in our call centres. 74% of child support calls were answered within 30 seconds on non-peak days, compared to a target of 70%.

The total number of telephone contacts through our automated telephone service INFOexpress was 13% less than last year. This was attributed mainly to tax agents increasingly using the online Look at Account Information service, which provides access to a wider range of clients' income details.

Building strong relationships with the community is valuable in maintaining compliance. Our liaison officers work in the community, addressing a wide range of tax and social support programmes. We also work closely with community groups which are able to influence large numbers of our customers.

Providing rulings on tax issues

By issuing private rulings on specific tax issues, we give customers certainty about specific tax positions they may be considering as part of their business activities. During the year, we finalised 79 private rulings that contained a total of 480 technical issues.

We also completed a total of 30 public items this year, including five interpretation statements or guidelines relating to:

• shortfall penalties - for not taking reasonable care
• shortfall penalties - unacceptable interpretation and unacceptable tax position
• shortfall penalties - for taking an abusive tax position
• income tax treatment for New Zealand patents
• Public Trustee Interpretation Statement.

All public items for current and previous years are published on our website: www.ird.govt.nz/technical-tax/public-rulings/

Supporting community networks

Kerry Dalton and Bryre Patchell Being visible in the community and working alongside our customers helps us to develop strong relationships and maintain voluntary compliance. Inland Revenue works in the community through our advisory officers and our support to community groups which also assist many of our customers. Two examples of these are our involvement with rural community networks at Heartlands centres and our relationship with the New Zealand Association of Citizens Advice Bureaux (CAB). There are 40 Heartlands centres around New Zealand where people can access many government services20in one place. Inland Revenue provides assistance on tax matters, family assistance and child support. Inland Revenue queries account for 14% of the total that come through the centres. Luana Poata, a social policy liaison officer in Whangarei, who regularly delivers assistance to the Kaitaia Heartlands centre, says "It's important that Inland Revenue is accessible to all communities. By being visible we're helping to break down the barriers and provide a link into Inland Revenue". The New Zealand Association of Citizens Advice Bureaux provides a range of free and impartial information to over 2,000 New Zealanders each day. In late 2004, Inland Revenue formalised its long-standing relationship with CAB by signing a service level agreement. Inland Revenue provides CAB with information, delivered in a way that is best for them so they can help their customers with Inland Revenue matters. Bryre Patchell, Group Manager Field Delivery, says "Our relationship with CAB helps us to break down barriers with customers who may initially not want to contact Inland Revenue". Kerry Dalton, Chief Executive CAB, added that "CAB recognises the positive direction that Inland Revenue is going in and the change happening throughout the organisation. This has led to a natural relationship with the focus on achieving better outcomes for our society".

^19. As set out in the Development Goals for the State Services, released by the State Services Commission in March 2005.
^20. Other government agencies include Work and Income, Housing New Zealand, The Community Law Service, Employment Relations Service and Child, Youth and Family.

Other pages in: Part three - Key strategies

• Promoting compliance
• Maintaining compliance with the law
• Tackling the harder end of compliance
• Gaining organisational efficiency
• Reducing compliance costs
• Developing the capability of our people and providing the tools they need
• Becoming an employer of choice
• Excellent state servants
• Key people statistics
• Developing our tools

Date published: 06 Nov 2006

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