NZ forced to revamp tax e-filing system

New Zealand's Inland Revenue Department (IRD) is to ditch its controversial electronic ir-File tax filing system after 16 months of operation, although it characterises the move as an "enhancement" to the system.

"We're not willing to go out and market that to any more users because of the problems," says Bryre Patchell, national manager for IRD's business direct unit, referring to the system built by Electronic Data Systems (EDS). ir-File was introduced in April 1999 and immediately ran into problems with its security system.

"We're enhancing the service so those kinds of issues are reduced dramatically or eliminated entirely," says Patchell. The enhancement comes in the form of a new internally developed system.

Whereas the ir-File system uses digital certificates, the new system will work in a similar manner to online banking -- 128-bit encryption provided by the browser and a user name/password log-in.

"It's simply a web application so you don't need any client-side application at all -- just internet access and a current browser, " he says. "Digital certificates are all lovely and wonderful but we've discovered that it can have a lot of issues for the user."

The new system will be trialled in October. Then Patchell intends rolling the system out to new customers, typically small to medium-sized enterprise employers, as well as to existing customers.

"There will be little difference in look and feel, they'll log on one day and access the new system."

Patchell says the trial will continue "as long as it's needed".

"We're not going to rush at this like a bull at a gate."

The problems with the ir-File stem from IRD's insistence that the system support client-side digital certificates -- something EDS provided by creating a separate application, an ActiveX control. The control uses Windows' cryptography API (CAPI) to process the certificate. Non-Windows systems cannot do this, and users who have a non-Microsoft browser, like Netscape for example, must download a plug-in to make the system work.

IRD was overwhelmed with calls to its help desk from users who could not log in, requiring IRD to hire extra help-desk staff to meet the demand.

EDS declined to comment.

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