2
The proposed Bill gives the Commissioner three additional options which are not mentioned in the present
Ordinance, namely:
(1)
requiring the appellant taxpayer to purchase Tax Reserve Certificates;
(2)
(3)
requiring the appellant taxpayer to furnish
an irrevocable bank guarantee for the tax in dispute and interest;
requiring the unsuccessful appellant
taxpayer to pay interest at a rate fixed by
the Chief Justice.
I can appreciate and accept the rationale behind the third option because it removes the incentive for taxpayers to use objection or appeal as a device for defer payment of tax, and therefore has the effect of discouraging frivolous cases. However, a number of questions regarding the first two options and the Commissioner's discretion immediately come to mind.
(1)
(2)
If the intention of the proposed Bill is to reduce default in payment of tax, then the purchase of Tax Reserve Certificates vis-a-vis an irrevocable bank guarantee
should be equally effective and acceptable. What are the rationale for the option to be the privilege of the Commissioner and the taxpayer has no right to choose?
If the discretion is with the Commissioner, is it not likely that during a year of
financial stringency for the Government's budget, the Commissioner will exercise his
discretion in favour of requiring Tax
Reserve Certificates?
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