Little Guys Uneasy About Digital Certificates

SYDNEY (01/27/2000) - "Ninety-nine percent of small business wouldn't have a bloody clue about PKI (Public Key Infrastructure)," says Rob Bastian, chief executive of the Council of Small Business Organisations of Australia.

Starting July 1, organizations turning over more than A$20 million (US$13 million) will be forced to electronically lodge tax returns using digital certificates in a PKI infrastructure. But those large firms make up only one percent of the 2.25 million businesses in Australia. For the rest, use of PKI and digital certificates in their dealings with the tax office will remain optional.

That presents the Australian Tax Office (ATO) with a huge education problem if it wants to nudge them onto the PKI bandwagon. PKI products and services create and manage the digital certificates which underpin legally-binding, business-to-business e-commerce activities.

Worldwide, the PKI market is primed to explode in the next three years. Global PKI revenues are tipped to top A$2 billion by 2003, about ten times last year's revenues, according to market researchers International Data Corp.

The tax office program is aimed at fast-tracking adoption of the technology here. The certificates will uniquely identify companies who file business activity statements containing information relating to income tax, withholding tax and the new Goods and Services Tax (GST).

The data will be lodged across the Internet in a PKI wrapper using software supplied by the tax office. Companies will be able to download the client software and obtain their certificates free of charge, according to assistant commission of GST computerization John Higham.

Each participating business will receive one certificate and no extra charges will be levied if circumstances demand that a company be issued with additional certificates.

They will use the certificates to identify themselves to the ATO's Web site from which they can download tax forms to be filled out offline and lodged electronically via the Internet. The system will be extended in future to permit other transactions to take place over the Internet between business and the tax office.

The PKI industry is jumping for joy over the tax office initiative. Industry sources estimate 50,000 to 100,000 companies will acquire certificates from the ATO over the next year. That expects that to spark demand for up to 500,000 certificates as companies realize they need more than one certificate per organization.

"A lot of companies who previously didn't even consider digital certificates will find themselves being driven toward PKI," says Bill Osborne, general manager of Certificates Australia, the company supplying the ATO's public key infrastructure technology. "When you find yourself dealing in a legally binding way with the ATO on matters that affect 48 percent of your revenues, it is going to drive home a lot of PKI-relevant issues. In my view it will only be a short period of time before organizations realize this sort of thing can deliver huge benefits."

According to Gregg Rowley, MD of PKI services vendor eSign Australia, any reasonably-sized company will need secondary certificates because they will have more than one person dealing with tax matters and each certificate must be tied to a specific individual. Rowley expects a secondary market of five certificates for each primary certificate issued by the ATO.

Copyright © 2000 IDG Communications, Inc.

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