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THURSDAY, MARCH 28, 1985
+IT USED TO BE QUITE SIMPLE TO DISTINGUISH BETWEEN TAX EVASION' 1.E. NON-DISCLOSURE OF RELEVANT FACTS OR THE PROVISION OF FALSE INFORMATION WHICH IS DEFINITELY ILLEGAL AND TAX AVO1 DAN CE' I.E. PROPER USE OF RELIEFS AND OTHER LEGISLATIVE PROVISIONS TO MINIMISE A PERSON'S TAX BILL WHICH IS LEGAL AND NOT CONSIDERED BY MANY AS MORALLY REPREHENSIBLE, MR POON SAID.
TO PUT IT SIMPLY, HE EXPLAINED, IF A PERSON COULD DO BUSINESS LEGALLY THROUGH EITHER METHOD A OR METHOD B, HE HAD EVERY RIGHT TO CHOOSE THE METHOD WHICH WOULD MINIMISE HIS TAX BURDEN.
+1 AM REFERRING TO GENUINE BUSINESS TRANSACTIONS, LEGAL AND PROPERLY EVIDENCED, AS AGAINST ARTIFICIAL OR SHAM TRANSACTIONS.
+ AS TAX RATES INCREASE AND TAX LAWS BECOME MORE COMPLICATED, SOME PEOPLE ARE TEMPTED TO ABUSE SUCH PRINCIPLE AND ENGAGE IN ARTIFICI AL SCHEMES, SOMETIMES DESCRIBED AS TAX AVOISION' E.G. IMPOSING A SERIES OF ARTIFICIAL OR CONTRIVED PREORDAINED STEPS OR TRANSACTIONS, WHICH HAVE NO COMMERCIAL PURPOSE, TO AVOID OR REDUCE THE TAX BILL USING LOOPHOLES IN THE TAX LEGISLATION.
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+THIS IS WHERE GOVERNMENT TAKES A SERIOUS VIEW AND PROPERLY REGARDS THEM AS UNACCEPTABLE,+ HE SAID.
J
MR POON ADMITTED THAT THE LINE BETWEEN 'TAX EVASION'
AND TAX AVOIDANCE MIGHT SOMETIMES BE VERY THIN.
+ ANTI-AVOIDANCE LEGISLATION OUGHT TO AIM AT CASES WHERE THE RE IS AN INTENTION TO EVADE TAX. 1 HAVE NO SYMPATHY FOR TAX-DODGERS,+ HE SAID.
+ON THE OTHER HAND, HONG KONG IS NOW A WELL-DEVELOPED FINANCIAL CENTRE. MANY TRANSACTIONS CONDUCTED BY TAXPAYERS ARE COMPLICATED AND SOPHISTICATED BY THEIR VERY NATURE.
+IN VIEW OF THIS, ANTI-AVOIDANCE LEGISLATION SHOULD AVOID CATCHING THE INNOCENT AS WELL AS THE GUILTY, HE ADDED.
MR POON SAID THAT EXPERIENCE OF ANTI-AVOIDANCE LEGISLATION ELSEWHERE HAD OFTEN SHOWN AN OVERKILL' AND ULTIMATELY SUCH LAWS WERE SOMETIMES CONSIDERED INEFFECTIVE BY THE COURTS.
HE URGED THE ADMINISTRATION AS WELL AS THE LEGISLATURE
TO BEAR ALL THIS IN MIND.
+TO ME, THERE IS NO SUCH THING AS 'RIGHT' OR 'WRONG' IN ANY PIECE OF TAX LEGISLATION. THE ONLY CONSIDERATIONS ARE WHETHER IT IS FAIR' 'REASON ABLE' 'NECESSARY' AND FINALLY
"WORKABLE',+ HE SAID.
/RECOGNISING IT
+