ATO kicks off income tax IT system swap-out

The Australian Tax Office has started rolling out a new income tax processing system in a project the agency says is enormous "even against global benchmarks".

An announcement on the start of the rollout was expected in late January, according to the ATO's last guidance.

Full implementation of the integrated core processing system was expected to take up to six days.

"This is a watershed decision to replace our national taxpayer system that has worked well since the mid 1970's," the tax office said.

It warned that many systems would be unavailable until 6am next Wednesday including its superannuation search systems and that other issues were expected.

"History tells us we can expect some teething issues after we deploy a new system of this magnitude," the agency said in a statement.

"We will begin by processing a small number of forms in the new system, gradually increasing as we bed in the system.

"We are putting in place extensive arrangements for managing the problems that will arise. Nevertheless, there will be impacts on our service standards which we will take all possible steps to minimise."

The ATO said it had chosen the "January quiet period" to migrate to the new system to minimise impact on taxpayers.

It said only 5 percent of lodgments were in this period.

Missing this window would have meant pushing back the rollout until Christmas, the ATO said.

The $725 million change program was expected to be completed in December.