+
WEDNESDAY, JUNE 13, 1934
5
MEASURES AGAINST TAX AVOIDANCE MUST BE FAIR
***
IT IS THE DUTY OF THE LEGISLATIVE COUNCIL TO ENSURE THAT MEASURES TO COUNTER TAX AVOIDANCE ACHIEVE THEIR OBJECTIVE IN A MANNER THAT IS FAIR, AND IS SEEN TO BE FAIR, TO ALL TAX PAYERS, THE HON BILL BROWN SAID TODAY.
HE WAS SPEAKING IN SUPPORT OF THE MOTION AT THE RESUMED DEBATE ON THE INLAND REVENUE (AMENDMENT) BILL 1984 IN HIS CAPACITY AS THE CONVENER OF THE COUNCIL'S AD HOC GROUP.
*THE AD HOC GROUP IS SATISFIED, SUBJECT TO THE AGREED AMENDMENTS TO BE PASSED AT THE COMMITTEE STAGE, THAT THE BILL NOW MEETS THESE CRITERIA,+ HE SAID.
THE AGREED AMENDMENTS WERE MOVED BY THE HON PETER C. WONG AND THE HON PETER POON.
MR BROWN POINTED OUT THERE HAD BEEN SIGNIFICANT REFINEMENTS TO THE BILL.
THE BILL, AS ORIGINALLY PUBLISHED TOGETHER WITH THE PUBLIC REVENUE PROTECTION (INLAND REVENUE) ORDER ON MARCH 30, CONTAINED PROVISIONS WHICH WERE RETROSPECTIVE IN THAT CERTAIN ITEMS WERE NEWLY BROUGHT TO CHARGE WITH EFFECT FROM A DATE PRIOR TO APRIL 1, 1984.
THE ADMINISTRATION HAS MADE REFINEMENTS TO THE ORIGINAL DRAFT OF THE BILL TO REMEDY THIS PARTICULAR ISSUE.
HE ALSO APPLAUDED THE ADMINISTRATION FOR MAKING PROVISION FOR FOREIGN TAX RELIEF.
+ALTHOUGH THESE AMENDMENTS WILL NOT PLEASE EVERYONE, THEY DO REMOVE MOST GENUINE BUSINESS TRANSACTIONS FROM THE AMBIT OF THE NEW PROPOSALS, HE SAID.
+UNOFFICIAL MEMBERS BELIEVE THE REFINEMENTS ARE A SENSIBLE SOLUTION TO THE PROBLEMS HIGHLIGHTED BY PUBLIC DEBATE, AND THEY THEREFORE SUPPORT THEM, HE ADDED.
HOWEVER, MR BROWN STRESSED THAT IN LEGISLATION OF THIS NATURE ACTUAL EXPERIENCE OF ITS WORKING WOULD PROBABLY REVEAL THE NEED FOR FURTHER FINE-TUNING.
+ONE AREA THAT I BELIEVE WILL REQUIRE WATCHING IS THE POSSIBLE IMPACT OF THE DECISION TO DISALLOW FOR TAX RELIEF INTEREST PAID BY A HONG KONG SUBSIDIARY OR ASSOCIATED COMPANY *TO AN OVERSEAS PARENT, HE SUGGESTED.
HE ALSO POINTED OUT THAT IT SEEMED IMPOSSIBLE TO PROVIDE A PRECISE DEFINITION OF THE TERM +CARRYING ON BUSINESS IN HONG KONG+ IN THE CONTEXT OF TAX LEGISLATION.
/+THE WORRIES