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HONGKONG LEGISLATIVE COUNCIL
NOVEL GLAUBES
The third general object of the Bill is to facilitate the collection of stamp duties, generally, and to prevent evasion. Under that beading, I would like to direct attention to certain clauses, some of which I think are novel, at least in this Colony.
Clause 10 of the Bill provides that, if any minimum amount is prescribed below which stamp duty is not to be payable, no person is to execute more instruments than would ordinarily be necessary in order to erade duty by auch "splitting." The present law provides that if a sum of money exceeding $10 is paid the person receiving it must not split up that amount into two portions if it is substantially one amount, in order thereby to evade receipt duty. That principle, of forbidding splitting in order to evade duty, is now by this clause applied generally. Sub-clause (2) of the same clause is aimed at the same evil. In some cases, the duty is at a higher rate on larger uniounts and this adb section prohibits any splitting for the purpose of evading the higher scale. Of course, it can be done by executing two or more documents which would pay duty only on the lower scale. That, in future, will be a criminal offence.
Clause 41 is intended to broaden and fasten the liability in cases of companies and other corporate bodies and firms. Sub-clause (1) provides that when an instrument which ought to be stampod is not stamped, every director, manager, secretary and other officer who knowingly is a party to the failure to stamp shall be deemed to have committed an offence but, in any case, the company itself shall be deemed to have committed an offence by the mere failure to stamp. The mere fact of failure to stamp if this section effects what it is intended to effect-will render the company liable to a fine; the directors and officers will also be liable to a fine if it can be shown that they were knowingly parties to the evasion of the duty, or failure to stamp. Sub-clause (2) contains a similar pro- vision with regard to arts. If an instru- ment which ought to be stamped is not atampet, and is extented in the name of the firm, every partner and servant of the firm who was knowingly a party to the failure to stamp is guilty of an offence, and in any case the person having the management of the firm is made liable merely on the ground of failure to stamp,
the idea being that he is a manager the firm end it is his duty to see th any document executed by the firm p the proper stamp duty. Sub-clause ( intended to enable the collector to information, in the case of a firm, asi the person really liable for the failuret stamp, and it provider that if a ment is not stamped that ought to stamped the partners and manager give the collector the fullest inform to enable him to take pro against such person.
Clause 42 deals with onus, and proclam that where a
person claims that instrument is not chargeable with de, or is chargeable with a duty on a scale than the collector claims, onus shall be on such person to estab such claim. That is new, and does n seem unreasonable. The facts of the transaction are more within the kno ledge of the person concerned than one elec, and it seems only fair that should have the onus of establishing t non-liability to duty, or of liability to las duty than that claimed by the collector."
Clause 43
empowers the collector inspect and search and take copies any case in which he thinks there mĨ be on the premises
any books accounts, or other documents, that m tend to show that stamp duty is brig evaded. That is new.
HONGKONG LEGISLATIVE COUNCIL
exceeding one year. We shall not tate to ask for imprisonment where mp duty is daliberately and sya
atically evaded.
THI
UNSTAMPED DOCUMENTS
would like to draw attention, sir, clause 6 of the Bill; that is the clause ch provides that unstamped docu- nts are not to be admissible in avid except in criminal proceedings, dare not to be admissible in proceedings fore any arbitrator or referee, and are not be registered or filed by any corporation public officer, unless they are stamped. particular provision I want to draw ention to is expressed at the end of sub- se (1), and in sub-clause (2). In many es the stamp duty imposed by this Bill y be paid within seven days after execu- . but if the document is to be produced court before the expiration of those ven days it must be produced stamped id is not admissible until it is stamped. other words, whether the time has me by which the document must be moped or not, if the person producing wishes to put it in evidence, or if it to be filed or registered, he must it, before he produces, or files, registers it.
Clase 16 deals with the question of amping by special leave after the per Line for stamping has expired. ader the existing law the collector is, in certain cases, power to stamp
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pay duty. If it is followed by a full conveyance is conveyance then the exempt from duty; if the agreement is rescinded then the stamp duty is return- ed.
The duty on share contract potes is also now in this Colony, and is to be found in heading 41 (5). The scale is 32 where the amount does not exceed $10,000, and is $5 where it exceeds $10,000. A similar duty exists in England, and also, I think, in the Straits Settlements, though I think in the Straits Settlements it is lower. Lu England in the United Kingdom - the scale is rather an elaborate one, but the duty amounts to 6d. on £100 to £1 on £20,000. Here the scale and schedule is divided into two portions only for convenience $2 and $5 only. The Bill also provides that on every sale or purchase of shares the broker must give a sale contract pute to the principal; if he does not he commits a criminal offence.
CERTIFICATES TO PRACTICE
Another new duty is that on certificates to practice-Heading No. 15. That is also dealt with in Clause 22 of the Bill. These certificates must be taken out by the various classes of persons mentioned in the section-architects, Barristers, dentists. medical practitioners, chemists, solicitors. They must take out an annual certificate to practice, for which they must pay $25 a year. As this Bill will come into foroe in the middle of the year, it is proposed to make regulations giving a certain time cnt these certificates for 1921. After that, certificates must be taken out before the following year commences-in December of each year for the following year.
be deemed to commit an offence. To that Gor-in-Council. This clause gives after the law comes into force for taking
Clause 44 is also new. It pun that any person who, for the purple; evading stamp duty falsifies or destage books of account or other instruments sle think, there can be no objection. I will refai later to a particular heading of de relating to the late registration dep which is also an attempt to close Pr door against evasion.
EVERYONE'S DUTY
The only other thing I would like say on this third object of the Bill that, of course, it is everyone's duty, these taxes are imposed by the lega lature, to accept them loyally and pay them, if not cheerfully, at without attempting to evade them. Th Government will not hesitate in ca of deliberate and persistent evasion ask for imprisonment. Clause 46 provide for a maximum the of $10,000, and provides for imprisonment for any ter
er the time has expired, but in other Mes it is necessary to apply to the he power in all cases to the collector. gives an appeal from the collector the Governor-in-Council 1 think it uld save time very often if the appli tion is made first of all to the lector, and if a person is dissatisfied ith his decision he can appeal to the
vernor-in-Council.
SHARE TRANSFERS
I should now like to refer to the various duties on shares. I have just referred to one; that is the share contract note. The FROPERTY SALES AND SHARE CONTRACTS transfer of shares under the bill will Tertain duties imposed by this Bill are
in future pay 50 cents for every $100. At present, the duty is 10 cents a hundred. to this Colony, though precedents I may say, 50 cents, or per cent., is them exist elsewhere. One is head the scale of duty payable in the United No. 5 in the schedule: agreement for Kingdom, and that is a scale not intro- be sale of property, That does not
duced during the war, but before the pply to goods, or shares, or ships, but war. In Heading 41 (1) it is proposed in Applies to all other property, and Committes to alter the fifth column so as to he idea is that if an agreement is read before execution"; in other words, so tered into for the future sale or con- as to provide that transfers of shares must pance of property that agreement must as at present, be stamped before execution.
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