The Inland Revenue Department has overhauled its eTAX submission process following an Ombudsman investigation into failed electronic tax return submissions, introducing safeguards, temporary data storage and clearer user prompts while providing penalty relief to affected taxpayers.
Hong Kong’s Inland Revenue Department has responded to an Ombudsman investigation released on 31 August 2026 regarding unsuccessful delivery of electronic tax returns. The report examined technical glitches that prevented members of the public from completing their tax filings through the eTAX platform during the previous year.
The IRD acknowledged the Ombudsman’s findings and accepted all recommendations put forward. Implementation of most measures has already begun or concluded. The issues documented in the report primarily stemmed from taxpayers’ submission attempts last year.
Since new system improvements took effect before the individual tax returns for the 2025/26 assessment year were issued in May 2026, the department has reported no similar complaints since.
The technical problem
The core issue involved taxpayers who completed digital signing through the “iAM Smart” authentication system while filing returns via eTAX but failed to navigate back to complete the submission. Several factors contributed to incomplete filings: user actions, browser or device status, network anomalies, and connection interruptions. The IRD received reports of these difficulties last year and initiated follow-up actions and system improvements.
A joint review by the IRD and the Digital Policy Office identified the procedural gaps. Between May of the previous year and January 2026, approximately 490,000 taxpayers used iAM Smart to sign individual tax returns through eTAX.
Data showed that over 90 per cent of users successfully submitted their returns on the first attempt. However, roughly 33,000 taxpayers encountered submission failures during their initial effort.
Of the 33,000 who failed initially, approximately 80 per cent reused iAM Smart to sign and successfully submit their returns before the IRD issued penalty notices or estimated assessments. Notably, about 14,000 of these taxpayers resubmitted on the same day as their failed attempt.
System enhancements implemented
Four specific improvements now guide users through the process more clearly:
A pop-up message was added to eTAX reminding users they must return to the system after completing digital signing via iAM Smart. Users who successfully submit returns now receive confirmation messages directly in their eTAX message boxes. Messages on confirmation pages and iAM Smart notifications have been strengthened to reinforce the requirement to return to eTAX.
Additionally, information entered into eTAX is now automatically saved temporarily, eliminating the need for users to re-enter details if they need to repeat the signing or submission process.
Relief and next steps
The IRD apologised for the inconvenience caused and stated that no taxpayers will face penalties related to the incident. Penalty remissions have been granted and refunds issued for taxpayers whose filings were delayed as a result. Two prosecutions connected to the incident have been withdrawn.
The department is currently processing requests for assessment revisions. For cases where taxpayers received estimated assessments but did not seek revision, the IRD will send letters before mid-September offering guidance on the revision process. The department stated it will process such applications promptly.
The IRD confirmed its commitment to advancing tax system digitalisation and will explore further improvements to eTAX operations. Discussions with the Digital Policy Office regarding enhanced connection mechanisms with iAM Smart are underway.
The department will also expand electronic demonstrations on its website through the New Tax Portals Learning Resources Centre to provide clearer guidance on the complete e-filing process. Staff training on identifying and responding to systemic issues will be strengthened.
