WEDNESDAY, MARCH 25, 1987
30
TAX DISPUTE CASES EXPLAINED
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SINCE THE INLAND REVENUE (AMENDMENT) (NO.2) BILL 1984 WAS ENACTED IN FEBRUARY 1985, SOME 65 000 OBJECTIONS HAVE BEEN RECEIVED, THE FINANCIAL SECRETARY, THE HON PIERS JACOBS, TOLD THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).
IN A WRITTEN REPLY TO A QUESTION BY THE HON RITA FAN, MR JACOBS SAID ACCORDING TO AVAILABLE INFORMATION, AN ESTIMATED 5 400 APPELLANT TAXPAYERS WERE REQUIRED TO MAKE IMMEDIATE PAYMENT IN CASH, BUT THE AMOUNT OF TAX INVOLVED WAS NOT AVAILABLE.
ANOTHER 1 674 APPELLANT TAXPAYERS WERE REQUIRED TO PURCHASE TAX RESERVE CERTIFICATES AMOUNTING TO ABOUT $903 MILLION AND 29 WERE REQUIRED TO FURNISH A BANK GUARANTEE INVOLVING SOME $52 MILLION, HE ADDED.
MR JACOBS SAID THAT AN ESTIMATED 57 000 APPELLANT TAXPAYERS WERE GRANTED UNCONDITIONAL HOLDOVER OF TAX BY THE COMMISSIONER OF INLAND REVENUE BUT THE AMOUNT OF TAX INVOLVED WAS NOT KNOWN.
HE NOTED THAT THESE 57 000 CASES ARE REFERRED TO AS HOLDOVER CASES SINCE, IN EVERY CASE WHERE AN OBJECTION IS LODGED, A HOLDOVER MUST BE CONSIDERED.
+ HOWEVER IN MANY CASES, THE TAX IN DISPUTE CAN BE DISCHARGED BEFORE THE DUE DATE FOR PAYMENT ARRIVES AND THE HOLDOVER OF THIS TAX BECOMES A MERE FORMALITY, + MR JACOBS SAID.
+FOR EXAMPLE, WHERE A TAXPAYER FAILS TO SUBMIT A RETURN WITHIN THE PRESCRIBED TIME, AN ESTIMATED ASSESSMENT WILL BE ISSUED. AGAINST THIS ASSESSMENT, THE TAXPAYER WILL USUALLY LODGE AN OBJECTION ON THE GROUNDS THAT THE ASSESSMENT IS EXCESSIVE.+
HE SAID THAT IN ORDER TO VALIDATE THE OBJECTION, A RETURN MUST BE SUBMITTED, THEN IT WOULD BECOME APPARENT TO THE ASSESSOR THAT THE ESTIMATED ASSESSMENT WAS EXCESSIVE AND SHOULD BE REVISED DOWNWARDS. IN THIS SITUATION, THE TAX IN DISPUTE COULD OFTEN BE DISCHARGED BEFORE THE DUE DATE.
+ HOWEVER, IN CASES WHERE IT IS NOT POSSIBLE TO DISCHARGE THE ASSESSMENT BEFORE THE DUE DATE, A HOLDOVER ORDER IS ISSUED. IT SHALL BE NOTED THAT UNCONDITIONAL HOLDOVER ORDERS ARE ALWAYS ISSUED IN RESPECT OF PROVISIONAL TAX IN DISPUTE IN AN ASSESSMENT UNDER OBJECTION, HE ADDED.
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