TUESDAY, MAY 24, 1977
5.
ALMOST EVERY PROFESSION AND EVERY SELECTION OF THE BUSINESS COMMUNITY IS REPRESENTED AND IT WOULD BE MISLEADING TO SINGLE OUT ANY ONE CLASS, MR, AU-YEUNG SAID.
HE ALSO POINTED OUT THAT PROFITS ARISING FROM ILLEGAL ACTIVITIES WERE ASSESSABLE TO TAX IF THESE ACTIVITIES WERE OF SUCH A NATURE THAT THEY WOULD CONSTITUTE A TRADE OR BUSINESS.
+WE HAVE ENCOUNTERED INSTANCES OF MASSIVE EVASION BY THESE ACTIVITIES AND I BELIEVE THE REVENUE LEAK IN THIS DIRECTION MUST BE SUBSTANTIAL, + HE SAID.
MR. AU-YEUNG EMPHASISED THAT THE TAX LAW, AS AMENDED IN 1975, IMPOSES HEAVY MONETARY FINES AND PENALTIES FOR BREACHES OF STATUTORY TAX OBLIGATIONS WHICH INCLUDE THE MAKING OF INCORRECT RETURNS AND FAILURE TO FILE RETURNS.
THE MAXIMUM PENALTIES HAD BEEN INCREASED FROM 100 PER CENT TO 300 PER CENT OF THE TAX EVADED SO AS TO PROVIDE A STRONGER DETERRENT EFFECT. IN SOME WILFUL EVASION CASES, SUCH AS THOSE OF FRAUDULENT CLAIMS OR FALSE RETURNS, THE OFFENDERS COULD BE SENT TO PRISON.
IN 1976-77. THREE CASES INVOLVING WILFUL INTENT TO EVADE TAX WERE SUCCESSFULLY PROSECUTED IN THE COURTS AND THE ACCUSED WERE CONVICTED.
IN ADDITION TO PAYING A SUBSTANTIAL FINE AND PENALTY, TWO WERE SENTENCED TO IMPRISONMENT THOUGH SUSPENDED FOR A PERIOD OF 18 MONTHS.
A MORE LENIENT VIEW WOULD BE TAKEN OF THOSE WHO VOLUNTARILY APPROACH THE DEPARTMENT FOR A FULL DISCLOSURE OF THEIR MISDEEDS THAN THOSE WHO WERE PICKED UP AS A RESULT OF INVESTIGATION, MR. AU-YEUNG SAID.
+WHILE I BELIEVE A GREAT MAJORITY OF TAXPAYERS HAVE MADE HONEST RETURNS, IT IS A PRACTICAL CERTAINTY THAT THERE IS STILL CONSIDERABLE LEAKAGE OF TAX DUE FROM THE LESS SCRUPULOUS MINORITY, HE ADDED.
TO REDUCE THE EVASION OF TAX, THE DEPARTMENT HAD TAKEN VARIOUS MEASURES INCLUDING WIDE-SPREAD PUBLICITY TO ENCOURAGE PEOPLE TO NOTIFY THE TAX AUTHORITY OF THEIR TAX LIABILITY SIMPLIFIED FORM OF RETURNS- PERIODICAL NOTIFICATIONS IN THE PRESS- ISSUE OF GUIDELINE TO ACCOUNTANTS AND INCREASE IN THE SIZE OF THE DEPARTMENT'S INVESTIGATION BRANCH.
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