TNAG-1441-FCO40-1925-Constitutional-development-in-Hong-Kong-1987 — Page 217

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Inland Revenue (Amendment) Ordinance 1984 and the Draft Inland Revenue (Amendment) Bill 1985

Annex

In July 1985 the Inland Revenue (Amendment) (No. 4) Bill 1985 was submitted to Executive Council for consideration. The Bill sought to implement proposals made by the Financial Secretary in his 1985 Budget Speech, mainly to replace the existing general anti-tax avoidance provisions with legislation which would provide the Commissioner of Inland Revenue with more effective anti-avoidance powers.

Alerted to the provisions of this new bill, and concerned about its complexity and the possible effects that it might have on business confidence in Hong Kong, UMELCO in July 1985 decided to convene an Ad Hoc Inland Revenue Review panel with the following Terms of

Reference

"Having regard to Hong Kong's long standing policy of

policy of maintaining a simple and stable tax environment conducive to investment and confidence, the Ad Hoc Panel will

(1) examine

the

Inland

Revenue

(Amendment) Ordinance 1984 (Note) and the relevant Practice Note

ascertain conform(s) with

whether

to

they

the

(it) declared

(2)

intention and spirit of the Ordinance;

examine the draft Bill published on Friday 19.7.85 on anti-avoidance measures;

(3) examine the cumulative effect of recent amendments to the Inland Revenue Ordinance to ascertain their effect on the economy and business confidence;

(4)

(5)

Note: The Inland

consult widely and receive further representations from the public; and

report to UMELCO by 10 September."

Revenue (Amendment)

brought interest earned off shore

Ordinance 1984

by non-banking

businesses within the ambit of Hong Kong tax. Its subject matter, being closely related to the problem of tax avoidance, had been controversial.

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