I
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THURSDAY, MAY 1, 1980
BUT, HE SAID, THE GOVERNMENT'S REASONS FOR NOT ADOPTING THE SYSTEM WERE:
* HONG KONG'S DEDICATION TO A COMPARATIVELY LOW LEVEL OF
DIRECT TAXATION WHICH IS ON THE ONE HAND AS PRODUCTIVE OF REVENUE AS POSSIBLE AND AT THE SAME TIME SIMPLE AND INEXPENSIVE TO ADMINISTER-
* PAYE SYSTEM ARE INVARIABLY COMPLEX AND ALWAYS EXPENSIVE FOR
GOVERNMENTS TO OPERATE-
* EXPERIENCE ELSEWHERE HAS SHOWN THAT PAYE SYSTEMS INVOLVE
A VERY REAL COST TO EMPLOYERS WHO ARE INEVITABLY INVOLVED
IN THEIR OPERATION=
* THERE WOULD BE A NEED FOR A VERY LARGE POLICING OPERATION
TO ENSURE ON THE ONE HAND THAT DEDUCTIONS MADE BY EMPLOYERS ARE PROPERLY ACCOUNTED FOR, AND ON THE OTHER TO GUARD AGAINST UNSCRUPULOUS EMPLOYERS WHO MIGHT DEDUCT +TAX+ UNSUSPECTING AND UNSOPHISTICATED EMPLOYEES, AND
FROM
* THE NOT INSIGNIFICANT COST TO THE TAXPAYER -- WHO LOSES THE
USE OF HIS FUNDS AND IS THUS DENIED THE OPPORTUNITY TO EMPLOY THEM PROFITABLY UNTIL THE ANNUAL PAYMENT DATES FALL DUE.
MR LADD EXPLAINED THAT GIVEN THE LIGHTNESS OF THE LOAD AND BEARING IN MIND THAT THE VAST MAJORITY OF TAXPAYERS DO MANAGE TO PAY ON TIME WITH VERY LITTLE DIFFICULTY, IT WOULD NOT MAKE SENSE TO INTRODUCE WHAT WOULD BE A VERY COSTLY SYSTEM FOR BOTH THE GOVERNMENT AND THE PUBLIC.
HE ALSO DREW ATTENTION TO THE PROBLEM OF POLICING IF THE PAYE SYSTEM WAS ADOPTED HERE.
+MOST COUNTRIES WHICH OPERATE PAYE SYSTEMS HAVE FOUND IT NECESSARY, OR AT LEAST ADVISABLE, TO ENGAGE SIGNIFICANT NUMBERS OF INSPECTION STAFF TO VISIT EMPLOYERS' PREMISES TO ENSURE THAT DEDUCTIONS MADE ARE PROPERLY ACCOUNTED FOR,+ MR LADD SAID.
ON THE COST TO TAXPAYERS. MR LADD NOTED THAT UNDER THE PAYE SYSTEM, THE CASH DEDUCTED WAS IMMEDIATELY LOST TO AN EMPLOYEE.
+UNDER THE EXISTING SYSTEM, HOWEVER, HE RETAINS THE USE OF HIS MONEY AND IF, AS MANY PEOPLE DO, HE MAKES PROVISION BY SETTING ASIDE HIMSELF THE CASH WHICH HE WILL REQUIRE TO PAY HIS TAX, HE HAS THE OPPORTUNITY OF EARNING SOME ADDITIONAL INCOME,+ HE ADDED.
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