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(Source : Government Information Centre)

Inland Revenue (Amendment) Bill to accept use of password and telephone in filing tax returns passed


The Inland Revenue (Amendment) (No. 2) Bill 2001, which seeks to provide a legal basis for the use of passwords and telephones in filing tax returns, was passed by the Legislative Council today (February 26).

The newly enacted Ordinance contains two major amendments. First, it allows for the use of a password approved by the Commissioner of Inland Revenue as an alternative to the use of a digital certificate for authentication and fulfillment of the signature requirement for tax returns filed under the Government's Electronic Service Delivery (ESD) Scheme.

At present, taxpayers are allowed to file the major types of tax returns electronically through the Internet. The types of tax returns covered by the ESD Scheme include the tax returns for individuals and property tax returns. In addition, taxpayers may also file their profits tax returns in Electronic Government Forms (e-Forms) through the Internet. Under the present mode of operation, taxpayers need to apply to a recognized certificate authority for a digital certificate and use the certificate for authentication and signing of the tax returns by affixing digital signatures. Electronic filing of tax returns with the use of digital signatures has already been provided for in the Electronic Transactions Ordinance.

"The amendment relating to the acceptance of passwords is to provide greater convenience for taxpayers and encourage more taxpayers to make use of the ESD Scheme to file tax returns. The Inland Revenue Department will continue to accept the use of digital certificate for tax returns filed under the ESD Scheme," a Government spokesman said.

The second amendment included in the new Ordinance is to provide taxpayers with another convenient mode of electronic means for filing tax returns, which is by telephone (telefiling).

The existing Ordinance does not provide for lodgement of tax returns by telephone. To cater for telefiling, additional provisions have been made in the Bill to extend the meaning of "returns" to cover particulars furnished by telefiling, to provide that the Commissioner of Inland Revenue shall specify eligibility criteria for cases where tax returns may be furnished by telefiling. The detailed eligibility criteria will be published by notice in the Gazette.

"This telefiling service will be made available for simple salaries tax and property tax cases for individuals, which meet the prescribed criteria for telefiling. The requirement that the service be available only for simpler cases is due to practical considerations, such as the need to keep the time taken in furnishing the return by telephone within a reasonable limit. We estimate that some 800,000 taxpayers will be able to make use of the new telefiling service," the spokesman said.

"The lodgement of tax returns through telephone and the use of passwords under the ESD Scheme will enhance tax return lodgement services by offering new means of lodgement to the public, and at the same time, improve IRD's operational efficiency by saving the time required for transcribing and inputting the information on a physical tax return into the department's database."

"A taxpayer has first to register with IRD as its 'TeleTax' user if he wishes to file a tax return electronically with a password. The taxpayer will then have to register with the system a password of his own choice. We invite taxpayers to register immediately if they have not yet done so. The TeleTax registration form can be obtained through downloading from the IRD web site ( or Fax-a-Form service at 2598 6001," he added.

The amendments will take effect on a date to be published in the Gazette in March this year.

End/Wednesday, February 26, 2003