The Inland Revenue Department says it's not trying to block New Zealand companies from competing for work on its major online revamp and all are welcome to apply.
Critics say the requirements, as set out in the request for expressions of interest, would automatically exclude most New Zealand firms.
One criteria is that companies have been involved in upgrades worth at least $100 million, for a national tax authority.
The Labour Party says that's prohibitive, and would shut out most New Zealand companies.
United Future leader and former IRD Minister, Peter Dunne, says New Zealand companies may have to form partnerships but he hopes the department will actively encourage local industry.
The IRD says it hasn't excluded any company, domestic or foreign, as long as it has the requisite capability and skills.
And it says there will be many more opportunities for companies to tender for work on the 10-year project.
Greg James from the IRD says individual companies, or a group of companies, are all welcome to apply.
"The procurement process opportunity is open to all service providers regardless of location and Inland Revenue welcomes expressions of interest from individual companies or groups or indeed consortiums that have the required skills to enable us to lay the foundation for transformation."