XN000022-1977-05-24 — Page 5

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TUESDAY, MAY 24, 1977

OVER $77 MILLION IN UNREPORTED PROFITS DISCOVERED BY INLAND REVENUE DEPARTMENT ******

THE INLAND REVENUE DEPARTMENT HAS UNCOVERED 82 CASES INVOLVING MORE THAN $77 MILLION IN UNREPORTED PROFITS DURING THE LAST FINANCIAL YEAR - 67 PER CENT MORE THAN THE PREVIOUS YEAR.

THIS WAS DISCLOSED BY THE ACTING ASSISTANT COMMISSJONER OF INLAND REVENUE, MR. ANTHONY AU-YEUNG, THIS (TUESDAY) AFTERNOON AT THE LIONS CLUB OF LION ROCK LUNCHEON MEETING,

+THE FIGURE REPRESENTED AN AVERAGE UNDERSTATEMENT OF $940,000 PER CASE, WHICH IS SOMETHING LIKE 78 PER CENT OF THE PROFITS THAT SHOULD HAVE BEEN RETURNED. IN OTHER WORDS ONLY 22 PER CENT OF THE TRUE PROF ITS HAVE BEEN RETURNED PRIOR TO INVESTIGATION (BY THE INLAND REVENUE DEPARTMENT),+ MR. AU-YEUNG SAID.

THE TAX FIDDLE ADOPTED BY DISHONEST TAXPAYERS RANGED FROM SOMETHING SIMPLE SUCH AS PADDED WAGE BILLS TO MORE SOPHISTICATED SCHEME OF TAX EVASION, HE SAID.

ONE VERY COMMON FORM OF EVASION PRACTISED IN HONG KONG IS UN-RECORDED DRAWINGS FROM ACCOUNTS.

+WHATEVER THE FORM IT TAKES TAX EVASION IS A COMMUNAL SIN WHICH OUGHT TO BE STRONGLY DISCOURAGED. ONE COMMON FEATURE IN ALL TAX EVASION CASES IS THAT THE GOVERNMENT SUFFERS A LOSS OF REVENUE WHICH IS ANOTHER WAY OF SAYING THAT THE EVADER MANAGES TO MAKE HIS FELLOW CITIZENS PAY SOMETHING THAT OUGHT TO HAVE COME OUT OF HIS OWN POCKET,+ MR. AU-YEUNG SAID.

+ IT MUST BE APPRECIATED THAT SETTLING A BACK DUTY CASE IS A PAINSTAKING, TIME CONSUMING AND OFTEN FRUSTRATING EXERCISE REQUIRING A HIGH DEGREE OF SKILL BECAUSE IN ORDER TO GET AT THE REAL FACTS OF THE MATTER, IT INVARIABLY INVOLVES GOING BEYOND THE TAXPAYER'S BUSINESS DOCUMENTS AND HAVING ACCESS TO HIS PRIVATE FINANCIAL DOCUMENTS AS WELL.

+SINCE SO MUCH FURTHER LIABILITY HAS BEEN BROUGHT TO LIGHT BY INQUIRIES OF THE REVENUE, ITS CONCLUSION IS OBVIOUS THAT MUCH STILL REMAINS TO BE DONE TO COMBAT TAX EVASION.+

THE AMOUNT OF REVENUE LOST THROUGH TAX EVASION IN HONG KONG COULD NOT BE DEFINITELY KNOWN, BUT TAX EVADERS COVER A VERY BROAD SPECTRUM OF LIFE IN HONG KONG.

/ALMOST