ATO tax returns backlogged no longer

The Australian Taxation Office (ATO) has processed "the majority" of tax returns that had been delayed during its software implementation earlier this year.

The implementation was part of the ATO's $749m Change Program, which would put in place a new integrated core processing system (ICP) by July 2010.

The ATO ceased processing tax returns throughout January and resumed at a slower but steadily increasing pace in February, after having switched to the new software during the Australia Day long weekend.

According to the ATO's Second Commissioner David Butler, the new software enabled operators to process tax returns via a modern, browser-based user interface.

It also accessed other key ATO systems, including work and case management, client relationship management, inbound and outbound, document storage and data warehouse systems.

Built on the software architectural principle of Enterprise Application Integration (EAI) and the Extract, Transform and Load (ETL) data warehousing process, the ICP replaced a fragmented approach that had been in place since the mid 1970s.

"Our new system forms part of an integrated enterprise architecture," Butler told iTnews.

"It is a more component-based system which relies on codes tables rather than hard coding, allowing for flexibility in making changes to the system, for example updating new tax rates."

Nearly 6,000 staff had used the new ICP to process income tax returns, and many were "providing positive feedback on its intuitiveness", Butler said.

Approximately one million income tax returns had been processed using the new system, including all stockpiled returns and returns received until the end of February, the ATO reported.

Refunds for returns that were lodged by the end of January were expected to have been issued, while refunds for the majority of those lodged in February would be issued this week.

The ATO said it processed approximately 16 million income tax returns, and managed 40 million forms, 12 million phone calls and four million incoming correspondence items every year.

The next and final step in its Change Program would be to move its Business Activity Statements and excise tax processes to the new system, including launching a new portal platform for tax agents, service providers and businesses.