More than 33,000 Hong Kong taxpayers completed digital signing for their individual tax returns through iAM Smart between May 2025 and January 2026 but did not successfully submit the returns through the Inland Revenue Department’s eTAX system.
The affected users had to return to eTAX after signing with iAM Smart and continue the process until reaching a confirmation page displaying a 16-digit transaction reference number. Those who did not complete that step had not delivered their returns to the department.
The Ombudsman found that wording and prompts in the e-filing and digital-signature interfaces were unclear. They could lead users to believe that completing the iAM Smart signing process alone meant their tax returns had been submitted.
The Ombudsman said the incident caused inconvenience to affected taxpayers. Thousands were reportedly subject to provisional assessments or late-filing penalties, while some people were prosecuted, although the report did not give precise numbers for each group.
In a response issued on 31 August 2026, the Inland Revenue Department said it had accepted all 18 recommendations. It said affected taxpayers would not be penalised, and that penalties imposed because of the incident would be cancelled or refunded if they had already been paid. The department also said two related prosecutions had been withdrawn.
The department said it had added pop-up reminders to eTAX and improved the confirmation page shown after digital signing. Most of the recommended measures had either begun or been completed, it said.
The Ombudsman said a similar problem had been reported to the department in 2022. Wording on iAM Smart’s signing-confirmation page was changed the following year, but the Ombudsman found that the clarity problem had not been fully resolved.
The department said it had received no similar complaints since the latest changes. The Ombudsman’s announcement and the department’s response did not specify the exact number of affected taxpayers, the final number of cancelled or refunded penalties, or a timetable for each recommendation.