XN000022-1993-07-15 — Page 19

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THURSDAY, JULY 15, 1993

HE POINTED OUT THAT HONG KONG'S REPORTING REQUIREMENTS WERE NOT ONEROUS AND THE TAX RATES WERE AMONG THE LOWEST IN THE WORLD.

ADDRESSING THE ESTATE DOCTORS ASSOCIATION'S SEMINAR TODAY (THURSDAY), MR AU-YEUNG OUTLINED THE FIELD AUDIT PROGRAMME INTRODUCED IN JUNE 1991 AIMING TO GET FIRST-HAND KNOWLEDGE OF THE ACTUAL CIRCUMSTANCES OF BUSINESSES.

FIFTY-FOUR AUDITORS ARE NOW DEPLOYED TO VISIT THE BUSINESSES TO

CHECK THE BOOKS AND RECORDS.

LAST YEAR THE FIELD AUDITORS EXAMINED THE RETURNS OF QUITE DIVERSE GROUP OF BUSINESSES.

MR AU-YEUNG NOTED THAT SOME RETURNS FROM MEMBERS OF THE MEDICAL PROFESSION HAD ATTRACTED THE AUDITORS' ATTENTION.

HE SAID IN ASSESSING THE APPROPRIATE LEVEL OF PENALTIES TO BE APPLIED, A NUMBER OF FACTORS WOULD BE TAKEN INTO ACCOUNT:

* CO-OPERATION OF THE TAXPAYER

IN RECOGNITION OF THE CO-OPERATION OF THE TAXPAYER IN HELPING TO QUANTIFY HIS CORRECT ASSESSABLE PROFITS, A LOWER LEVEL OF PENALTY WILL BE CONSIDERED.

* TIME INVOLVED

PENALTY LEVELS WILL BE INCREASED TO REFLECT THE TIME TAKEN TO COMPLETE THE AUDIT.

* DEGREE OF CULPABILITY

PENALTIES WILL BE INCREASED WHEN THE LEVEL OF CULPABILITY IS GREATER.

* COMMERCIAL RESTITUTION

THE PENALTY LEVEL WILL REFLECT AN ELEMENT OF COMMERCIAL RESTITUTION TO COMPENSATE THE GOVERNMENT FOR THE THE USE OF THOSE UNDERCHARGED TAX.

LOSS OF

OVERALL,

"UNTIL NOW, THE PENALTIES IMPOSED IN AUDIT CASES MAY, HAVE BEEN LESS THAN THOSE IMPOSED WHEN A PULL INVESTIGATION IS CARRIED OUT.

"THERE IS NO REASON WHY FIELD AUDIT PENALTIES MUST REMAIN AT THESE LOWER LEVELS, AND IF I FIND THAT THEY ARE NOT

THE HAVING REQUIRED DETERRENT EFFECT, THEY CAN BE INCREASED,

HE SAID.

PERSON ANY

WHO WILFULLY MAKES AN INCORRECT RETURN WITH THE INTENTION OF EVADING TAX PLACES HIMSELF AT THE RISK OF PROSECUTION THE COURTS.

IN

CONVICTION, UPON

TIMES THE TAX UNDERCHARGED, OF UP TO THREE YEARS.

IN ADDITION TO A HEAVY FINE OF UP TO

THERE IS THE RISK OF A CUSTODIAL

THREE SENTENCE

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