XN000022-1977-02-16 — Page 3

WEDNESDAY, FEBRUARY 16, 1977

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THE MAIN RECOMMENDATIONS IN THE REPORT ARE AS FOLLOWS:

1. THAT THE EXISTING SYSTEM OF VOLUNTARY PERSONAL ASSESSMENT BE

REPLACED BY A COMPULSORY SYSTEM OF ASSESSMENT ON TOTAL INCOME FROM

SALARIES, BUSINESS PROFITS, INTEREST AND RENT.

THIS WOULD NOT IN ANY WAY EXTEND THE TOTALITY OF THE EXISTING CHARGES BUT WOULD MEAN THAT, GENERALLY SPEAKING, ALL PERSONS DERIVING INCOME OF THE KINDS MENTIONED WOULD BE OBLIGED TO FILE A RETURN OF TOTAL INCOME AND WOULD IN DUE COURSE RECEIVE AN ASSESSMENT ON TOTAL INCOME.

2.

THE COMMITTEE FELT THAT THIS WOULD-

(A) REMOVE THE MULTIPLICITY OF RETURNS AND ASSESSMENTS

INHERENT IN THE EXISTING SYSTEM OF PERSONAL ASSESSMENT AND THE HEAVY EXPENDITURE ON MANPOWER WHICH THIS ENTAILS AND THAT IT WOULD PERMIT THE DIVERSION OF THIS MANPOWER TO THE DETECTION AND PREVENTION OF EVASION.

B) ASSIST THE INVESTIGATION SECTION OF THE INLAND REVENUE

DEPARTMENT IN ITS WORK.

(C) REMOVE CERTAIN ANOMALIES IN THE PRESENT SYSTEM. THESE

ANOMALIES ARISE WHERE TWO TAXPAYERS RECEIVING THE SAME AMOUNT OF INCOME CHARGEABLE TO TAX PAY SUBSTANTIALLY DIFFERENT AMOUNTS OF TAX,

(D) REMOVE THE ADMINISTRATIVE COMPLICATIONS INHERENT IN A SYSTEM WHICH DEPENDS ON AN ELECTION BEING MADE BY THE TAXPAYER.

(E) BE AN ESSENTIAL STEP TOWARDS THE INTRODUCTION OF A

FURTHER DEGREE OF PROGRESSIVITY IN THE RATES OF TAX SHOULD THIS BE THOUGHT NECESSARY.

THAT PROPERTY TAX, BASED AS IT IS ON ESTIMATED RENTAL VALUES

SUPPLIED BY THE COMMISSIONER OF RATING AND VALUATION, SHOULD BE

COMPLETELY ABOLISHED AND REPLACED BY INCLUDING THE ACTUAL NET RENT

IN THE RETURN OF TOTAL INCOME AND ASSESSMENT MENTIONED EARLIER.

THE COMMITTEE FOUND THAT THE EXISTING PROPERTY TAX SYSTEM WAS NEITHER SIMPLE NOR EFFICIENT AND NOTED THE FOLLOWING DEFECTS-

(1) THE FACT THAT THREE GOVERNMENT DEPARTMENTS WERE INVOLVED

IN ITS ADMINISTRATION.

THE FACT