XN000022-1993-03-04 — Page 5

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THURSDAY, MARCH 4, 1993

COMMISSIONER FOR INLAND REVENUE: NOW WITH REGARD ΤΟ TAX EVASION, IT'S VERY DIFFICULT TO IDENTIFY A CONCRETE FIGURE. EVERY YEAR FROM OUR INVESTIGATIVE UNIT AND FROM OUR FIELD AUDIT UNIT, WE DETECT SOME PHENOMENA OF TAX EVASION AND FROM SUCH FIGURES WE BELIEVE THAT THE LOSS CAN BE A FEW HUNDRED MILLION DOLLARS BUT WE DON'T HAVE AN EXACT FIGURE. BUT ACCORDING то

OUR OBSERVATION, THE HONG KONG TAX RATE IS NOT VERY HIGH AND ALSO OUR TAX ALLOWANCE IS ALSO QUITE GENEROUS AND SO IF WE LOOK AT THE PROBLEM FROM THIS ANGLE, TAX EVASION IS NOT AS SERIOUS AS ONE WOULD EXPECT AND IN THE BUDGET WE TALK ABOUT MEASURES TO CURB OR COMBAT TAX AVOIDANCE AND EVASION AND WE THINK THAT FOR TAX AVOIDANCE THE AMOUNT INVOLVED IS ABOUT ONE HUNDRED MILLION DOLLARS A YEAR. CONCERNING THE INLAND REVENUE DEPARTMENT AND THE GOVERNMENT WE ARE VERY CONCERNED ABOUT THE PROBLEMS OF TAX AVOIDANCE AND EVASION AND IN THE COMING YEAR, APART FROM STRENGTHENING OUR MANPOWER RESOURCES, WE WILL ALSO HAVE REDEPLOYMENT OF RESOURCES WITHIN OUR DEPARTMENT AND FOR OUR FEW AUDIT TEAM WE WILL HAVE NINE EXTRA ASSESSORS AND WE HAVE ALSO REDEPLOYED PEOPLE FROM UNIT ONE AND THAT IS TO SAY WE AT PRESENT HAVE 36 ASSESSORS AND WE WILL HAVE 18 MORE AND ALSO THERE WILL BE MORE OFFICERS FOR THE INVESTIGATION UNIT. WE EXPECT THAT WITH THE STRENGTHENING OF MANPOWER RESOURCES WE WILL BE ABLE TO COPE BETTER WITH THIS PROBLEM.

APART FROM

CONCERNING

QUESTION:

NOW ACCORDING TO THE PRESENT SITUATION, THE TWO SITUATIONS MENTIONED IN

THE BUDGET INTELLECTUAL PROPERTY RIGHTS AND VEHICLES FIRST REGISTRATION TAX, DO YOU DETECT OTHER MODES OF AVOIDANCE AND EVASJON?

COMMISSIONER FOR INLAND REVENUE: (SI) NO WE HAVE LONG BEEN CONCERNED ABOUT METHODS OF EVASION AND AVOIDANCE BUT WE CAN ONLY MAKE THESE KNOWN AT AN APPROPRIATE TIME AND IF WE HAVE MEASURES IN MIND AND IF WE ANNOUNCE THEM WE WILL HAVE TO IMPLEMENT THEM. NOW WE HAVE SECTION 61A OF THE INLAND REVENUE ORDINANCE TO PREVENT TAX AVOIDANCE AND EVASION.

QUESTION:

AFTER SO MANY YEARS OF CAUTIOUS, CAREFUL BUDGETS, CAN YOU TELL US WHAT THE CATALYST WAS THAT ALLOWED YOU то BE SO BENEVOLENT THIS YEAR AND ALSO DID IT NEVER CROSS YOUR MIND THAT PEOPLE MIGHT READ A DARKER, POLITICAL ELEMENT INTO YOUR GENEROSITY?

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