Hong Kong Inland Revenue Renews Pressure On Tax Evaders
The Hong Kong press has reported that the
Inland Revenue Department (IRD) is stepping up its efforts to crackdown
on the city's wealthy tax evaders. According to Deloitte Touche Tohmatsu,
the renewed pressure from the IRD on evaders will last around six years
during which time one in three taxpayers are likely to be investigated
and more than a quarter of IRD staff will be allocated to the inquiries. 'Whenever there's a case in dispute, the
IRD will now send someone to the company to talk to them, instead of sitting
in the office and communicating with letters,' said Kaiser Kwan, a tax
partner with Deloitte's and head of the firm's Field Audit and Investigation
(FAI) unit. Already, over the last financial year, the
IRD reclaimed around $2.32 billion in unpaid taxes, including penalties,
which is an 8 per cent increase on the previous year. 'The traditional
tax assessment method involved correspondence between the department and
the taxpayer. That usually took a long time and as a result a lot of cases
piled up. The results of the field audit teams were very good, as they
were able to uncover even more cases, and the penalties were very stiff,
sometimes as much as $10 million,' said Kwan. People found guilty of tax evasion have been
fined between 40 and 200 per cent of the undercharged tax and some may
face jail. The maximum punishment is a fine three times the amount of
tax undercharged and six years in prison. .
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