Listed accounting software developer Xero says moves by the Inland Revenue Department to connect electronically with taxpayers will reduce compliance for business owners and save the IRD a fortune.
Chief executive Rod Drury said the IRD's move to electronically connect with small businesses, including a Facebook connection, was "savvy".
The IRD aims to work with software companies to provide an electronic connection between businesses and tax information, such as PAYE and GST.
Revenue Minister Peter Dunne said taxpayers would connect to the system much like internet banking.
He said the IRD sent out 26 million pieces of correspondence every year and aimed to dramatically reduce it.
Drury said the IRD had read the business environment correctly, given the pervasive nature of the internet, the arrival of low-cost netbooks and the solutions available from online accounting and payroll providers.
"We think it's really smart because effectively it's a public/private sector partnership. What we've done at Xero is invest in systems to make it easy for small businesses to be compliant."
Drury said Xero had predicted the change but it had happened earlier than expected. He said the decision by the IRD to run services online would be a major accelerator for the internet industry in New Zealand.
Shares in Xero closed unchanged at $1.45 yesterday.
Software firm hails IRD electronic link
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