TNAG-1361-FCO40-1807-Hong-Kong-Hansard-reports-and-minutes-of-the-meetings-of-the-1985 — Page 247

Sir,

Revised

SPEECH BY THE HONOURABLE THE FINANCIAL SECRETARY IN LEGISLATIVE COUNCIL: WEDNESDAY 6 FEBRUARY 1985

I have followed with interest the debate on this

amendment to the Inland Revenue Ordinance and am pleased that we are now close to seeing it reach the statute book.

In the period since the debate on the second reading was adjourned, the LegCo Ad Hoc Group, under the Chairmanship of Mr Brown, has closely scrutinised the Bill. The amendments which have resulted from their endeavours

have, I believe, served to broaden and strengthen it.

Members will realise that this is an important

piece of legislation. It is designed to discourage the growing practice of entering objections or appeals solely for the purpose of deferring payment of tax. There is at present nearly $3 billion of tax held over much of which should never have been the subject of an appeal in the first place. Clearly it is time to bring to an end over-generous treatment accorded to appellants by the Inland Revenue Department. legislation will enable the Commissioner to apply a more realistic approach in deciding which cases merit hold over and which do not.

The new

The new laws will not penalise the genuine appellant since, if he has a good case and is ultimately successful, he will receive interest on any Tax Reserve Certificates which the Commissioner may have required him to buy as security for the tax in dispute. But if the objection is unsuccessful, the Tax Reserve Certificates will be used to discharge the tax liability without payment of interest.

The two alternatives to the purchase of Tax Reserve Certificates proposed by the Ad Hoc Group will work rather

/differently.