=
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HONGKONG LEGISLATIVE COUNCIL
is compulsory, but the current opinion is that except in certain special cases, stamping is voluntary as in the United Kingdom.
3. Certain duties imposed by the bill are entirely new, ie, the duties on agreements for the sale of goods. (Head ing No. 4), on exchange contracts (Head- ing No. 92 and clause 23), and on tele- graphic transfers (Heading No. 43 and clause 28), and the late registration duty referred to in Heading No. 41 (2) and clause 29. Others are new to the Colony, ie, the duties on share contract notes imposed by Heading No. 41 (5) and clause 27, and on certificates to practise (Heading No. 15 and clause 22).
4.-Sections 10, 41, 42, 43 and 44 are also peculiar to the bill. They are at- Lempts to facilitate collection and to prevent evasion.
5. The definitions in clause 8 of the bill are based largely on the United Kingdom Acts. Attention is drawn to the new definitions of "cheque" and "partnership instrument." The former will make illegal the evasion of bill of exchange duty carried out by the use of cheques (in the old sense) drawn by bankers here on their branches or agents outside the Colony. The definition of partnership instrument," it will be seen, is not limited to instruments used in the formation of a partnership.
-Sub-clause (5) of clause 5 makes the payment of stamp duty a civil debt, and the non-payment of stamp duty a criminal offence, except where an the schedule stamping is stated to be voluntary.
7-Clause 6 is intended to make all unatamped instruments inadmissible in evidence or for registration, even though, at the time when the instrument is tendered, the payment of duty has not vet, by lapse of time. become a civil debt or a criminal hability.
8.-Clause 10, which deals with split- ting, is a general application of a prin- ciple which has hitherto been applied in the Colony, and in the United King dom, only to the particular case receipta.
of
9-Clause 16, which relates to late stamping by special leave, given to the Collector some powers at present posses- sed only by the Governor-in-Council.
It is thought that this will conducs: greater convenience and despatch, any person aggrieved will be able appeal to the Governor in Council.
10. The duty on agreements for sale of property, introduced by clause ? has been adopted from the United Kin dom Stamp Acts. It is intended to pr vent ovasion of conveyance duty. T agreement pays the same ad valorem dut as a conveyance, and the subsequent com yegance pays nothing. If the agreeme is rescinded, the duty is returnable. T heading does not apply to agreements fo the sale of goods, vessels, or immovab property situate out of the Colony.
11-Clause 22, which deals with cer ficates to practise, introduces a form taxation new to the Colony. The op precedent known is the annual certificat required in the United Kingdom from solicitors and notaries public. there varies from 3 to £9.
The f Under th clause in the bill the certificates must 5 taken out before beginning to practice e, in the general case, they should be taken out in December for the following
year.
A temporary regulation will, how ever, be made allowing to persons in practice at the commencement of the Ordinance & period of one month from that date to take out their certificates for 1921.
12. Clause 23 introduces another e tirely new duty, that on exchange com tracte. Exchange contracts which result in transactions that pay bill of exchang or telegraphic transfer duty will not pay exchange contract duty. The rate of duty is the same as that on bills of exchange and telegraphic transfers, ie, 10 cents on every $500.
by clause 27 is new in Hongkong, but
13. The share contract duty introduces exists in the United Kingdom. The seal in the United Kingdom advances b thirteen steps, from Ed. on £100 to £io amounts over £20,000. The scale in the
Schedule to the bill is 82 for all amounts up to $10,000, and 85 for all amounts above that figure.
introduced by clause 23 is new, but the
14. The telegraphic transfer duty
seems to be no valid reason why remit escape duty while remittances by bill of Lances by telegraphic transfer should exchange pay.
The rate is the same al the bill of exchange and exchange com tract rate, .e., 10 cents for every $500
HONGKONG LEGISLATIVE COUNCIL
222
severe, but it will probably be used com- paratively seldom and it is considered very desirable to have the power
reserve.
19. The maximum penalty provided in clause 46 may seem high, but the tempta tions to evasion, and the gain resulting from continued evasion, will be great is certain cases.
collect
15-Clause 29 is an attempt to deal th the problem of blank transfers, ie, ansfers of shares executed by the re- tered owner in which the name of the asferee is left blank. These transfers to successive purchasers before being ally completed and registered and thus ay transfers escape paying duty. The estion of making all blank transfers gal was considered but it was thought
such a prohibition would interfere 20. The Companies (Sale of Shares) duly with a common practice which has Ordinance, 1801, Ordinance No. 5 of 1891, found to be useful and convenient. which is known as "Keswick's Ordin- ank transfers are therefore not made ance," is repealed in clause 47 (1) because agal, but an inducement to prompt it does not seem reasonable to istration of transfers is offered, ot, under one Ordinance a duty on instru- rhaps it should be said, a penalty is ments which are made void by another aced on late registrations. The scale of Ordinance. That position would arise if balties is given in Heading No. 41 (8) Ordinance No. 3 of 1891 were allowed to
the Schedule. No late registration
stand on the statute book after the intro- malty is incurred if the transfer duction of the new Share Contract Note gistered within one month after execu-duty (100 Heading No. 42 (5) in the The Ordinance, in any case, on by the transferor. It must, however. schedule). o be overlooked that this late registra on duty is only an additional safeguard ast prasica, and that every transfer shares must in any event pay the share ansfer duty. It should be noted that future all transfere of shares must tain the true date of execution by the ransferor, and that no transfers must accepted unless they either (a) contain date of execution by the transferor r (6) are duly stamped. This clause fers only to shares on registers kept in
Colony.
IN
has not justified itself.
21. The subject of death duties was formerly regulated by the Stamp Ordin- ance, 1901, Ordinance No. 16 of 1801, and when a new scale of death duties was introduced by the Estate Duty Ordinance, 1915, Ordinance No. 16 of 1915, it was provided that the old scale should apply to the estates of persons dying before the commencement of the Estate Duty Ordin ance. It seems unnecessary to preserve this temporary provision any longer. To repeal it is the object of sub-clause (3) of elanee 47 of the bill.
18.-Clause 41 is meant to fasten and roaden the liability in the case of instru- ients executed in the name of a corporate edy or firm. It is intended that criminal atility shall attach, to the corporate jody itself in the former case, and to e person appearing to have the manage ut in the latter case, upon more failure stamp. In other words, the corporate ody in the one case, and the manager
the other case, will be liable for the ere omission, apart from any question
intention to evade or of guilty know-Point seems to be a convenient and suit dg, and will be bound to see that the able one at which to impose a tax, and the yield should be substantial. Agree- artrument is duly stamped.
ments where the value of the goods does not exceed #100 are exempt. An adhesive stamp may be used if the agreement be stamped before execution by any party thereto; otherwise, the agreement must be stamped with an over-embossed stamp. Stamping is compulsory.
22. The following remarks apply to the Schedule to the bill:-
Heading No. 1:—Adjudication fee:-- bern ruised The adjudication fee has from $1 to $10. The amount of duty involved in an adjudication is usually large-
Heading No. 41-Agreement for the sale of goods:-This duty is new, but the
17-As it is desirable that the anus ould be placed expressly on one side or other it seems not unreasonable to lace it on the party who has both the owledge of the facts and a personal cuniary interest in the result of the daim or appeal (see clause 42).
18-The power of inspection given by claus: 43 may seem rather wide and
Heading No. 5: Agreement for the sale of property-This has been dealt with in paragraph 10 above.
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