CO129-586-8 War Taxation 2-2-1940 - 11-5-1940 — Page 146

Notes on the Hong Kong Draft Ordinance

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(1) Clause 6. The person liable to pay the tax should be more precisely identified. Under the clause the tax is payable "in the first place" by the person "who normally pays the assessed rates"; the expression "in the first place" implies that in default of payment the tax may be recovered from some other person, but the Bill does not say from whom. It may also be doubtful, in particular cases, who does normally pay the rates. These uncertainties might prejudice proceedings for recovery under Chapter VIII.

"Rates" in the penultimate line should apparently be

"rent".

(2) Clause 7. The procedure is payment of the tax and refund of the proportion for the period when the property is unoccupied: it may be convenient to provide that the tax should not be levied for such period, enabling the proportion to be discharged and not collected at all. This could be done by substituting "relief from" for "refund of" and "allowed" for "made" in line 1 of the Clause.

(3) Clause 8 (b)(i). The model ordinance exempts the official emoluments of the "officer administering the Government", so as to give exemption to an officer acting as Governor for the period for which he so acts. See Colonial Office Circular Despatch to Colonial Governments of 13th May 1936.

In Clause 8 (b)(iii)&. (iv), "income" is presumably income from "office or employment" to which this Chapter relates.

(4) Clause 13 and 14. Clause 13 refers to "profits of such trade or business which are made from transactions in the Colony of such trade or business": Clause 14 refers to "profits of such trade or business made from, transactions in the Colony". This difference is presumably one of drafting only.

(5) Clause 14.

In view of the definitions of "person" and "body of persons" in Clause 2, the words "or firm" in line 2 are apparently not needed.

(6) Clause 15.

The intention is presumably to exempt profits arising in Hong Kong if they are liable to Income Tax in the United Kingdom or some other part of the Empire. As the Clause stands, exemption is only granted if the whole of the taxpayer's income is so liable. But there might be cases in which part of the taxpayer's income was not charged to United Kingdom Income Tax, although his income from Hong Kong was so charged: in certain circumstances the United Kingdom charge does not extend to the full amount of the income, e.g. in respect of certain foreign income, the charge is restricted to the amounts remitted to or received in the United Kingdom. The same position may arise in relation to other parts of the Empire. It would be desirable to redraft the Clause so as to make it clear that the profits to be exempted are those profits arising in Hong Kong which are liable to tax in the United Kingdom or some other part of the Empire.

It might be well to define "British Empire"; cf. Clause 4(4)(b).