SATURDAY, MARCH 4, 1989
FS TO MOVE COMMITTEE STAGE AMENDMENT TO INLAND REVENUE BILL
THE FINANCIAL SECRETARY, MR PIERS JACOBS, WILL MOVE A COMMITTEE STAGE AMENDMENT TO THE INLAND REVENUE (AMENDMENT) BILL 1989 AT THE MEETING OF THE LEGISLATIVE COUNCIL ON WEDNESDAY (MARCH 8).
THE AMENDMENT, IF APPROVED, WILL ENABLE THE COMMISSIONER OF INLAND REVENUE TO MORE EFFICIENTLY ASSESS AND COLLECT PROFITS TAX DUE BY CERTAIN NON-RESIDENTS ON PROFITS DERIVED FROM HONG KONG.
A GOVERNMENT SPOKESMAN SAID TODAY (SATURDAY) THAT THE DRAFT AMENDMENT BILL, WHICH WAS FIRST INTRODUCED INTO THE LEGISLATIVE COUNCIL IN NOVEMBER LAST YEAR, SOUGHT TO ENABLE A NON-RESIDENT TO BE CHARGEABLE TO TAX IN THE NAME OF A PERSON IN HONG KONG WHERE THAT PERSON, ALTHOUGH NOT AN AGENT OF THE NON-RESIDENT WAS NEVERTHELESS A PERSON FROM WHOM THE NON-RESIDENT WAS IN RECEIPT OF PROFITS OR INCOME ARISING IN HONG KONG.
"HOWEVER, IN THE COURSE OF CONSULTATION WITH PROFESSIONAL ORGANISATIONS AND MEMBERS OF THE LEGAL AND ACCOUNTING PROFESSIONS, IT WAS SUGGESTED THAT THE SCOPE OF THE BILL AS DRAFTED MIGHT BE TOO WIDE AND COULD HAVE HAD UNINTENDED TAXATION IMPLICATIONS FOR THOSE PERSONS IN HONG KONG WHO HAVE BUSINESS DEALINGS WITH NON-RESIDENTS," THE SPOKESMAN SAID.
"THE GOVERNMENT HAS THEREFORE PROPOSED AMENDMENTS TO THE BILL AT THE COMMITTEE STAGE, HE ADDED.
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THESE AMENDMENTS HAVE THE EFFECT OF LIMITING THE SCOPE OF OPERATION OF THE NEW PROVISIONS IN THE BILL TO A SPECIFIED AND RESTRICTED CLASS OF NON-RESIDENT.
IN ESSENCE, THIS CLASS COMPRISES NON-RESIDENTS IN RECEIPT OF ROYALTIES AND LICENCE FEES FROM HONG KONG. AND NON-RESIDENT ENTERTAINERS AND PERFORMERS WHO PERFORM IN HONG KONG.
"THE AMENDMENTS WILL ENSURE THAT THE NEW PROVISIONS IN RESPECT OF THE COLLECTION OF PROFITS TAX FROM NON-RESIDENT PERSONS WILL APPLY ONLY TO SITUATIONS WHERE PERSONS IN HONG KONG, WHO ARE NOT AGENTS, DEAL WITH THIS SPECIFIED CLASS OF NON-RESIDENT.
"THIS WOULD MEET THE CONCERN EARLIER EXPRESSED IN SOME QUARTERS OF THE LEGAL AND ACCOUNTING PROFESSIONS, THE SPOKESMAN SAID.
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THIS CLASS OF NON-RESIDENT INCLUDES THOSE CATEGORIES OF NON-HONG KONG RESIDENT FROM WHOM THE COMMISSIONER OF INLAND REVENUE BELIEVES TAX COLLECTION IS AT PRESENT AT GREATEST RISK.
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THE SPOKESMAN EMPHASISED THAT THE PROPOSED AMENDMENTS NOT, IN ANY WAY, ALTER THE PRESENT TAXATION SYSTEM OR ITS APPLICATION, BUT WOULD FACILITATE COLLECTION BY THE INLAND REVENUE DEPARTMENT PROFITS TAX FROM NON-RESIDENTS.
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