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LAN
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FRIDAY, JULY 19, 1985
+THESE DEVICES INCLUDE THE USE OF LEVERAGED LEASING ARRANGEMENTS AND SALE AND LEASE-BACK' ARRANGEMENTS.
+THIS BILL THEREFORE SEEKS, INTER ALIA, TO INTRODUCE PROVISIONS TO DENY TAX-PAYERS DEPRECIATION ALLOWANCES IN RESPECT OF CERTAIN EQUIPMENT LEASING SCHEMES. THE PROPOSALS ARE MEANT TO DISCOURAGE TAX AVOIDANCE AND TO PROVIDE THE COMMISSIONER WITH ADDITIONAL POWERS WHERE AVOIDANCE SCHEMES ARE DISCOVERED,+ HE SAID.
THE BACKGROUND TO ANOTHER KEY FEATURE OF THE BILL DATED BACK TO 1983 WHEN THE PRIVY COUNCIL HANDED DOWN A DECISION WHICH HAD THE EFFECT OF PERMITTING TAX-PAYERS TO CLAIM, AS EXPENSES DEDUCTIBLE FOR PROFITS TAX PURPOSES, CERTAIN ACCOUNTING PROVISIONS NOTWITHSTANDING THAT ACTUAL PAYMENT OF SUCH EXPENSES MAY NOT BE LEGALLY DUE FOR MANY YEARS AHEAD.
+ IT IS THOUGHT THAT THIS DECISION HAS FAR-REACHING CONSEQUENCES AND HAS OPENED UP POSSIBILITIES FOR TAX ABUSE.
+ACCORDINGLY, IT IS PROPOSED TO AMEND THE LAW TO NARROW THE SCOPE FOR MANIPULATION,+ HE ADDED.
THE SPOKESMAN POINTED OUT THAT THE OPPORTUNITY WAS ALSO BEING TAKEN TO INTRODUCE CERTAIN REFINEMENTS TO THE BASIC LEGISLATION CONCERNING THE DEDUCTION OF INTEREST FOR PROFITS TAX PURPOSES.
+THESE REFINEMENTS WILL PERMIT THE ALLOWANCE OF INTEREST PAYABLE IN RESPECT OF PUBLICLY LISTED DEBENTURES (IRRESPECTIVE OF THE DATE OF LISTING) AND IN RESPECT OF MARKETABLE COMMERCIAL PAPER', SUCH AS FLOATING RATE NOTES AND CERTIFICATES OF DEPOSITS,+ HE SAID.
THE PROPOSED REFINEMENTS ARE A RESULT OF VARIOUS REPRESENTATIONS RECEIVED AFTER THE ENACTMENT OF THE INLAND REVENUE (AMENDMENT) ORDINANCE 1984.
THE BILL ALSO CONTAINS A NUMBER OF TECHNICAL AMENDMENTS WHICH ARE IN GENERAL OF A MINOR NATURE.
IN A SEPARATE PRESS RELEASE TO BE ISSUED TODAY, UMELCO ANNOUNCED THE FORMATION OF AN AD HOC INLAND REVENUE REVIEW GROUP, UNDER THE CHAIRMANSHIP OF HON Q.W. LEE, TO STUDY THE GENERAL ISSUE OF TAX AVOIDANCE AND TO CONSIDER THE BILL PUBLISHED BY THE GOVERNMENT.
PUBLIC COMMENTS AND VIEWS ON THE BILL MAY, THEREFORE, BE SENT DIRECTLY TO THE AD HOC GROUP AT THE UMELCO OFFICE, SWIRE HOUSE, 12/F, CHATER ROAD, CENTRAL, AND, IN ADDITION OR ALTERNATIVELY, TO THE DEPUTY FINANCIAL SECRETARY, GOVERNMENT SECRETARIAT, 5/F, LOWER ALBERT ROAD, CENTRAL.
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