WHY E-FILING
Among the main objectives of the implementation
of the e-Filing system are to increase the speed and
effectiveness of the processing of tax returns submitted
by taxpayers to the tax agency. This is important because
every year the number of eligible individual taxpayers
increases progressively, directly affecting the work load
and time required by the tax agency to process tax forms
received.
The e-Filing system is open around the clock while,
in comparison, manual filing is limited by the operation
hours of the state tax offices. Furthermore, the main bulk
of the tedious and lengthy process before the advent
of e-Filing was the heaps of data entry work required.
Manual filing increases operating costs and data
entry errors. The processing time and potential errors
are greatly reduced in e-Filing because the inherent
characteristics of an e-Filing system help taxpayers
fill out their tax forms more efficiently. Tax refunds to
tax payers can similarly be processed faster and more
efficiently due to the computerised system.
THE EVOLUTION OF E-FILING
Back in 2004 and 2005, when the first step towards
computerisation of the Tax Filing processes began, the
system was rather rudimentary in nature. Taxpayers could
only download the tax filing forms in Microsoft Excel
and Adobe PDF formats. After filling in and printing the
forms, taxpayers still had to go over to their respective
state tax offices and manually deliver the forms. While
this system was a step forward, it was still troublesome.
The next logical step for LHDNM then was to work
on a system that would enable tax submissions to be
completed over the web effortlessly. This e-Filing system
would eliminate most of the hassles and difficulties
associated with the annual submission of tax returns.
MAINTAINING THE INTEGRITY
OF THE SYSTEM
While the concept of e-Filing is simple and very
attractive, building a system that is robust and safe was
not an easy task given that e-Filing is essentially an
online web service. LHDNM was concerned about the
increasing threats of malicious cyber-attacks on business
applications and networks that rely on the use of digital
credentials to control how users and entities access
sensitive data and critical system resources.
To cultivate taxpayers’ trust, the e-Filing system
is protected by Public Key Infrastructure (PKI) based
security with digital signatures on top of common
security features such as firewall, intrusion prevention
system (IPS) and anti-virus. PKI technology which
strengthens online transaction security, and at the same
time protects users’ sensitive information is the main
strategy deployed to tackle online security issues. This
directly addresses processes that require proof of the
identity of participants in a transaction; proof that the
contents of communications have not been tampered
with; and protection of sensitive or restricted data.
In other words, it addresses three critical elements in
internet security which are authentication; integrity
and confidentiality. Another element addressed is the
principle of non-repudiation which means that it will not
be possible to successfully challenge the validity of any
transaction.
PKI are necessary to help ascertain the identity of different
people, devices, and services. In a nutshell, PKI goes way
beyond the use of user IDs and passwords, employing
cryptographic technologies such as digital signatures
and digital certificates to create unique credentials that
can be validated beyond reasonable doubt and on a
mass scale. PKI technology is already used more widely
than one might think. It is a cornerstone of how data is
encrypted as it is passed over the internet using Secure
Sockets Layer (SSL) and Transport Layer Security (TLS).
Basically without PKI any sensitive online or ecommerce
transaction would not be practical.
To drill down into how PKI actually functions,
cryptography is deployed to provide all users in a
particular group with a set of cryptographic ‘keys’. A
public key available to anyone in the group and there is
a private key which must be kept secret and only used by
the entity to which it belongs. The keys are typically used
for tasks such as decryption or for the creation of digital
signatures.
Diskettes were originally used to store tax payers’
digital certificates
Digital certificate registration
pre-printed slip
A print of a Digital Certificate
Pin Number
61