3
(3) What criteria will the Commissioner adopt in
exercising his discretion?
Would the
taxpayer be required to prove that the
purchase of Tax Reserve Certificates would
cause the taxpayer serious financial
hardship before consideration can be given
to the use of a bank guarantee?
The proposed Bill is mainly dealing with tax assessments under objection. In objecting the assessment
raised by the Commissioner, the taxpayer has to state precisely the grounds of objection as required by Section 64 Subsection 1
of the Inland Revenue Ordinance. If the Commissioner considers
the objection to be based on insufficient grounds, no hold over
will be granted and the tax as assessed has to be paid immediately. On the other hand, if the Commissioner considers that the objection as presented contains sufficient grounds and
have substantial merits, but the full facts and judgements have to be carefully reviewed, then the Commissioner will grant an
hold over order on the payment of tax. In these cases, it can be said that the Commissioner's view point differs from that of
the taxpayer.
In view of this, I submit, Sir, that the hold
over on tax is allowed not out of generosity but based on merit and a desire to play safe. I fully appreciate that due to the wide ranging power given to the Commissioner of Inland Revenue under the existing law, the Commissioner has to exercise his power with care, so as not to be draconian. The proposed Bill,
however, enables the Commissioner to require the taxpayer to purchase Tax Reserve Certificates, irrespective of the merit of the taxpayer's objection or appeal.
Another point which is of great concern to the taxpayer is the time taken to finalise an objection. Many
public organisations have drawn the UMELCO's attention to this
fact. The Administration admits that the Board of Review
currently has over 300 cases pending decision, and the