TNAG-1361-FCO40-1807-Hong-Kong-Hansard-reports-and-minutes-of-the-meetings-of-the-1985 — Page 204

131.

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firstly to replace the existing general

anti-avoidance

provisions

contained

in

Section 61 of the Ordinance with legislation which will provide the Commissioner with more effective anti-avoidance powers;

secondly to

limit the opportunities for tax deferral through leveraged leasing arrangements for equipment used offshore and so-called "sale and lease-back" devices in general, and

thirdly to narrow the scope for manipulation of our profits tax expense deductions provisions following a 1983 Privy Council decision.

The opportunity will also be taken to introduce relatively minor technical changes to the principal Ordinance.

132.

some

Members will recall that I have always underlined the Government's continuing willingness to pay heed to constructive

criticism. After enactment of the 1984 Amendment Ordinance

relating to interest, a number of further representations were received which, over the past months, have been carefully studied by the Administration and by the LegCo Ad Hoc Group and UMELCO. Some of the representations have merit and may well require further amendments to the law. These can be embodied in

the proposed Bill by way of refinements to the basic legislation.

133.

The proposed anti-avoidance legislation will clearly require the most careful

careful drafting, and will be the subject of equally careful scrutiny by the Legislature. It is with this in mind that I propose to proceed by way of a separate Bill. Thus Members will be able separately to approve the personal tax reductions before turning to consideration of the anti-avoidance proposals.

G.F. 316

UNCLASSI

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