XN000022-1979-02-28 — Page 34

32

WEDNESDAY, FEBRUARY 28. 1979

THIRD INLAND REVENUE COMMITTEE RECOMMENDATIONS DESERVE

SPECIAL ATTENTION – FS

*****

THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE TODAY (WEDNESDAY) SAID THREE RECOMMENDATIONS OF THE THIRD INLAND REVENUE ORDINANCE REVIEW COMMITTEE DESERVED SPECIAL MENTION.

THESE RECOMMENDATIONS HAVE BEEN LOOKED AT BY A WORKING PARTY IN RECENT MONTHS, MR. HADDON-CAVE SAID.

FIRST, HE SAID, THE REVIEW COMMITTEE MADE SEVERAL SPECIFIC RECOMMENDATIONS FOR INCREASING THE POTENTIAL TAX YIELD FROM SHIPPING PROF ITS WITHOUT STRAINING THE TERRITORIAL AMBIT OF THE CHARGE.

THE RECOMMENDATIONS WOULD BE OF LITTLE BENEFIT TO THE REVENUE, HE NOTED.

+SO LONG AS TAX HAVENS CONTINUE TO EXIST, A CHANGE TO TAXING THE WHOLE OF THE PROFITS OF RESIDENT SHIPPING COMPANIES WOULD NOT BE VERY PRODUCTIVE TO REVENUE (PERHAPS THE YIELD MIGHT BE $10 MILLION A YEAR), HE SAID.

THERE WOULD ALSO BE DIFFICULTIES OF ENFORCEMENT, AND THE AMENDING LEGISLATION WOULD STILL BE OPEN TO AVOIDANCE MEASURES UNLESS STEPS WERE TAKEN TO GO CONSIDERABLY BEYOND THE COMMITTEE'S RECOMMENDATIONS. THE COMMITTEE ALSO POINTED OUT AN ANOMALY IN THE APPLICATION OF THE WITHHOLDING SYSTEM ADOPTED FOR INTEREST TAX PURPOSES.

+THAT IS TO SAY, A TRUSTEE RECEIVING INTEREST THAT HAS ALREADY SUFFERED WITHHOLDING TAX IS OBLIGED TO DEDUCT TAX A SECOND TIME FROM INTEREST PAID BY HIM TO THE BENEFICIARIES OF THE TRUST FUND.

+THE REVIEW COMMITTEE RECOMMENDED THAT RELIEF SHOULD BE AVAILABLE WHERE TRUSTEES BOTH RECEIVE AND PAY OUT INTEREST. THE GOVERNMENT AGREES THAT THE ANOMALY IS CAPABLE OF BEING REMOVED AND AN AMENDING BILL IS NOW BEING DRAFTED.+

THE THIRD RECOMMENDATION WAS THAT ANY GAP IN THE INTEREST TAX CHARGE ON SURPLUSES ARISING FROM CERTIFICATES OF DEPOSITS SHOULD BE CLOSED, MR. HADDON-CAVE SAID.

+WHILST THE GOVERNMENT AGREES THAT A POSSIBLE LACUNA IN THE ORDINANCE SHOULD BE RECTIFIED AND THE QUESTION OF CHARGEABILITY PUT BEYOND DOUBT, THE SUBJECT MATTER IS COMPLEX AND IS BEING FURTHER EXAMINED, THE FINANCIAL SECRETARY ADDED.

/33..