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MONDAY, APRIL 28, 1980
TAX EVADERS FACE GRIM FUTURE
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THE INLAND REVENUE DEPARTMENT RECOVERED $49 MILLION AS BACK TAX AND PENALTIES IN 142 TAX EVASION CASES DURING THE YEAR 1979-80, COMPARED WITH 26 CASES INVOLVING LESS THAN $1 MILLION 15 YEARS AGO.
THIS WAS STATED BY THE DEPUTY COMMISSIONER OF INLAND REVENUE,
MR ANTHONY AU-YEUNG, IN A TALK TO THE ROTARY CLUB OF THE NEW TERRITORIES TODAY (MONDAY).
MR AU-YEUNG SAID IN ADDITION THE PROFITS TAX UNIT AND THE SALARIES TAX UNIT OF THE DEPARTMENT WERE ALSO CARRYING OUT BACK DUTY ENQUIRIES IN SMALL AND SIMPLE CASES. THE BACK TAX AND PENALTIES RECOVERED BY THESE TWO UNITS IN 1979-80 AMOUNTED TO $10 MILLION.
+THE INVESTIGATION RESULTS SO FAR WERE QUITE IMPRESSIVE AND I ATTRIBUTE OUR SUCCESS PARTLY TO PAINSTAKING AND DETAILED WORK AND PARTLY TO THE PROVISION OF HEAVY PENALTIES FOR OFFENCES COMMITTED UNDER THE INLAND REVENUE ORDINANCE,+ MR AU-YEUNG SAID.
MR AU-YEUNG POINTED OUT THAT THE INVESTIGATION POWERS IN OUR TAX CODES WERE EFFECTIVE AND PRACTICAL. +WITH THE AID OF THESE POWERS, THE ABILITY OF THE INLAND REVENUE DEPARTMENT TO FIGHT EVASION HAS BEEN GREATLY ENHANCED, +
THEY INCLUDE:
* POWER TO OBTAIN INFORMATION FROM THE TAXPAYER HIMSELF
AND THIRD PARTIES,
POWER TO REQUIRE A STATEMENT OF ASSETS AND LIABILITIES AND OF OUTGOINGS AND RECEIPTS,
*
*
POWER TO APPLY FOR A SEARCH WARRANT,
*
REQUIREMENT FOR TAXPAYERS TO MAINTAIN SUFFICIENT RECORDS AND TO RETAIN THEM FOR SEVEN YEARS, AND
*
AN ADMINISTRATIVE PENALTY AS ALTERNATIVE TO PROSECUTION
PROCEEDINGS.
IN CASES WHERE ADEQUATE BUSINESS RECORDS ARE NON-EXISTENT OR NO PARTICULAR METHOD OF EVASION IS OBVIOUS, ONE DEVICE TO FIND OUT A TAXPAYER'S INCOME IS THE +ASSETS BETTERMENT METHOD+, MR AU-YEUNG SAID.
UNDER THIS METHOD, THE DIFFERENCE BETWEEN THE NET VALUE OF THE TAXPAYER'S ASSETS AT THE BEGINNING AND END OF A TAXABLE PERIOD, ADJUSTED FOR NON-DEDUCTIBLE EXPENDITURE AND NON-TAXABLE INCOME DURING THE PERIOD, IS COMPARED WITH THE INCOME REPORTED. ANY SHORTFALL MAY BE TREATED AS UNDISCLOSED OR UNDER-REPORTED TAXABLE INCOME.
MR AU-YEUNG SAID TAX EVASION WAS ONE OF THE STUMBLING BLOCKS TO MORE EFFECTIVE TAX POLICY AFFECTING THE BUDGET AND THE ECONOMY AS A WHOLE AND MIGHT HAVE SERIOUS SOCIAL AND POLITICAL CONSEQUENCES.
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