XN000022-1974-04-24 — Page 14

WEDNESDAY, APRIL 24, 1974

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LATE TAXPAYERS TO PAY MORE

TAXPAYERS WHO DO NOT PAY UP IN TIME WILL BE LIABLE TO HIGHER PENALTIES UNDER THE INLAND REVENUE CAMENDMENT) BILL 1974 INTRO- DUCED TODAY IN THE LEGISLATIVE COUNCIL.

THE BILL EMPOWERS THE COMMISSIONER OF INLAND REVENUE TO IMPOSE AN EXTRA 10 PER CENT SURCHARGE ON ANY AMOUNT OF TAX STILL UN- PAID SIX MONTHS AFTER THE DATE ON WHICH THE TAX WAS DUE FOR PAYMENT. THE 10 PER CENT SURCHARGE WILL BE IN ADDITION TO THE EXISTING FIVE PER CENT SURCHARGE ON UNPAID TAX.

IN HOVING THE SECOND READING OF THE BILL, THE ACTING FINANCIAL SECRETARY, THE HON. DAVID JORDAN, SAID THE EFFECTIVENESS OF THE 10 PER CENT SURCHARGE WOULD BE ASSESSED AFTER 12 MONTHS +TO SEE "WHETHER MORE STRINGENT MEASURES NEED TO BE INTRODUCED.+

HE EXPLAINED THAT THE EXISTING SURCHARGE OF UP TO FIVE PER CENT OF UNPAID TAX TAKES NO ACCOUNT OF THE LENGTH OF THE PERIOD OF DEFAULT. A DEFAULTER WOULD THUS, TEND TO LEAVE THE TAX AND SURCHARGE UNPAID FOR AS LONG AS POSSIBLE.

+AT CURRENT RATES OF INTEREST THE ADVANTAGE OF LEAVING TAX AND SURCHARGE UNPAID CAN BE QUITE CONSIDERABLE AND THE TAXAYER CANNOT LOSE SINCE HE CAN ALWAYS STOP FURTHER PROCEEDINGS BY PAYING THE AMOUNT DUE,+ MR. JORDAN SAID.

THE PROPOSED ADDITIONAL SURCHARGE OF UP TO TEN PER

CENT SHOULD, THEREFORE, ENCOURAGE EARLIER PAYMENT OF AMOUNTS DUE.

IF THE BILL IS PASSED, THE PROPOSAL WILL BE EFFECTIVE FROM JULY 1, THIS YEAR, WHICH SHOULD GIVE DEFAULTERS AMPLE TIME TO PAY UP BEFORE BECOMING LIABLE TO THE ADDITIONAL SURCHARGE.

IN ORDER TO ENSURE THAT NO TAX IN DEFAULT FOR MORE THAN SIX MONTHS BEFORE JULY 1 ESCAPES THE NEW PROVISION, THE BILL ENABLES THE COMMISSIONER TO LEVY A SURCHARGE OF UP TO TEN PER CENT IN THESE CASES EVEN THOUGH THE DUE DATE MIGHT BE BEFORE JULY 1.

THE BILL, WHICH SEEKS TO IMPLEMENT TWO OF THE TAX PROPOSALS THE FINANCIAL SECRETARY MADE IN HIS BUDGET SPEECH IN FEBRUARY, ALSO SEEKS TO INCREASE THE INITIAL ALLOWANCES FOR EXPENDITURE ON PLANT AND MACHINERY FROM ONE FIFTH TO ONE QUARTER, TO BE EFFECTIVE FROM APRIL 1, THIS YEAR.

ON APRIL 10, THE LEGISLATIVE COUNCIL MADE A RESOLUTION INTRODUCING A NEW TABLE OF RATES OF ANNUAL DEPRECIATION ALLOWANCES RANGING FROM FIVE TO 30 PER CENT FOR PLANT AND MACHINERY.

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