XN000022-1976-09-17 — Page 6

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FRIDAY, SEPTEMBER 17, 1976

TOUGHER MEASURES AGAINST INTEREST TAX DEFAULTERS

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THE INLAND REVENUE DEPARTMENT IS TO TAKE A TOUGHER LINE WITH INTEREST TAX DEFAULTERS.

A SPOKESMAN FOR THE DEPARTMENT SAID A NUMBER OF INTEREST PAYERS (MORTGAGORS AND BORROWERS) WERE NOT COMPLYING WITH THE LAW.

HE EXPLAINED: INTEREST TAX IS A WITHHOLDING TAX. WHERE A PERSON IN HONG KONG PAYS OR CREDITS TO ANY OTHER PERSON INTEREST, WHICH IS CHARGEABLE WITH INTEREST TAX, HE IS OBLIGED BY LAW TO DEDUCT INTEREST TAX AT SOURCE AT THE TIME HE MAKES THE PAYMENT OR CREDIT.+

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CURRENTLY, HE SAID, 15 PER CENT OF THE INTEREST MUST BE DEDUCTED, SO THAT THE RECIPIENT SHOULD RECEIVE AT THAT TIME 85 PER CENT OF THE INTEREST.

THE INTEREST PAYER, HAVING WITHHELD 15 PER CENT TAX FROM THE RECIPIENT ON BEHALF OF THE GOVERNMENT SHOULD THEN HAND OVER THAT TAX TO THE INLAND REVENUE DEPARTMENT WITHIN 30 DAYS, THE DEPARTMENT WILL GIVE TO THE RECIPIENT, THROUGH THE PAYER, A RECEIPT FOR THE TAX AND A DEDUCTION CERTIFICATE.

THE SPOKESMAN SAID +SOME INTEREST PAYERS ARE FAILING TO REMIT THE TAX THEY HAVE DEDUCTED TO THE INLAND REVENUE DEPARTMENT WITHIN 30 DAYS OF MAKING THE DEDUCTION. THE PAYERS OF INTEREST MUST NOT AWAIT THE ISSUE OF AN INTEREST TAX RETURN OR WAIT FOR A NOTICE OF DEMAND FOR THE TAX FROM THE DEPARTMENT.

+THE INLAND REVENUE DEPARTMENT TAKES A SERIOUS VIEW OF THIS OFFENCE AND THE PENALTY, ON CONVICTION, IS A FINE OF $2,000.*

+THE DEPARTMENT MAY IN THE PAST HAVE BEEN SOMEWHAT LENIENT IN THIS MATTER, THE SPOKESMAN SAID, +BUT WILL NOT HESITATE TO TAKE ALL NECESSARY LEGAL ACTION AGAINST THIS TYPE OF OFFENDER.+

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