Improved tax-collecting capabilities and increased operational efficiencies had to be drivers of the decision to merge the two departments, Gus O'Donnell, permanent secretary to the Treasury.
By integrating the information held in IT systems, tax collectors would be able to better audit people's accounts, he told the Treasury Sub-committee.
'Information sharing gives us the ability to put data together. This is very bad news for the dishonest taxpayer,' said O'Donnell.
O'Donnell said officials were aware of the complexity of the integration programme, but promised that services would not suffer- but both departments have suffered IT-related problems in recent times.
On top of improved tax collecting capabilities, the new department - which is yet to be named - will also have to deliver operational efficiencies through its IT systems.
Electronic VAT filing and tax returns are expected to reduce the administrative burden of the merger departments, with 3,000 job losses planned as a direct result of the merger.
But no new money will awarded to oversee the integration work.
The current outsourcing arrangements contained enough flexibility to allow the integration work without pushing up costs, said O'Donnell.
The chancellor announced that the Revenue and Customs were to merge in this year's budget.
Meetings between senior IT officials at the merging departments have already taken place. But final decisions will await the appointment of a chief information officer. An advert is expected shortly and this will be one of the first posts to be filled.
See also:
All Tax Bodies
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