Greens, Labour take aim at IRD contractors

Last updated 15:08 05/12/2012

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The newly appointed Inland Revenue Commissioner has come under fire from Labour and the Greens over the use of a consulting firm implicated in tax avoidance in the UK.

Opening the line of attack at a select committee hearing today, Greens leader Russel Norman asked Naomi Ferguson if she thought it was appropriate for the department to have dealings with Capgemini.

The French IT and business consulting firm, a major supplier of services to the British government, was recently accused by the Sunday Times newspaper of paying less than 1 per cent tax in the UK.

The firm was appointed last year by the New Zealand tax department to assist its business transformation process, which includes a $1.5 billion overhaul of the IRD's aging technology infrastructure.

Ferguson batted the critique away, stressing she had confidence in the department's procurement and supplier vetting procedures.

"We are concerned with what our suppliers do in New Zealand," she said. "They are taxed on revenues and profits that they make in the country. How they operate internationally is not something I am privy to."

Attempts by the National Party's Maggie Barry to turn the discussion to the IRD's technology infrastructure were steered back to Capgemini by Labour's Clayton Cosgrove.

He backed Norman's line, saying the question of whether Capgemini was tax compliant could be answered without breaching their privacy, in a similar way to how details of the controversial Novopay contract were disclosed by the Ministry of Education.

The two gained little traction, with Ferguson sticking to a recitation of official IRD policy.

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