XN000022-1996-11-15 — Page 6

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"Since the enactment of the legislation summer last year, the Inland Revenue Department has re-assessed 310 cases involving disguised employment and over 150 cases involving the payment of inflated management fees by professional firms," he said.

"As a result, the Department has recovered about $70 million in tax. There are about 1,000 further cases still under assessment."

Mr Tsang said the Government was also applying its attention and energy to the new legislation requiring proper and adequate business records for tax purposes.

In 1994 and 1995, the Government conducted two surveys on business establishments. The results recorded a score of 85 per cent of business establishments maintaining adequate records in 1995 compared with 60 per cent in 1994. This could be attributed to the legislation introduced in mid-1995 specifying minimum record standards for tax purposes and which increased the penalty for non-compliance.

"This is an encouraging sign, and we will strive to ensure that the number gets as close as possible to 100%."

To strengthen the system for the collection of tax debts, the Government would streamline the procedures relating to the imposition of the five per cent surcharge on tax overdue cases.

"We will also impose a further 10 per cent surcharge on tax debts overdue for more than six months, in line with the recommendation of the Public Accounts Committee of the Legislative Council," he said.

"All these measures show our determination to fight tax evasion and reduce the scope for tax avoidance," he added.

Turning to taxation development in Hong Kong, Mr Tsang noted that it was important to publish decided cases of tax appeal for the information of taxpayers and tax practitioners.

"We are in the process of putting new decisions of the High Court on tax appeal cases on the Inland Revenue Department's homepage on the Internet," he said.

"Our next step will be to put the Board of Review decisions on the Internet as well." he added.

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