Acting chief 'shifted blame' in expat row

PUBLISHED : Thursday, 15 February, 2001, 12:00am
UPDATED : Thursday, 15 February, 2001, 12:00am

Acting Commissioner for Inland Revenue Elmo D'Souza misled the Legislative Council in the row over expatriates evading taxes, a Legco committee has found.

The Public Accounts Committee said it was 'seriously dismayed' that the acting chief had sought to use the privacy ordinance as an excuse and shift the blame to the Immigration Department. It urged that evaded taxes be recovered without further excuses.

In November, the Audit Commission criticised the department for failing to prevent expatriates from leaving without paying tax worth $213 million from 1997 to last year. The department has set up an ad hoc committee to consider solutions, such as requiring employers to withhold some money from expatriates to cover their tax.

In a public hearing late last year, Mr D'Souza cited the enactment of the privacy law in 1996 as one of the reasons why the department had difficulties in chasing tax defaulters.

He said the Immigration Department used to alert his department to tax defaulters entering and leaving Hong Kong. But he said the information was not readily available after the Personal Data (Privacy) Ordinance was enacted.

But the committee said it later found out that tax collection was exempt from the privacy law. The Immigration Department could provide defaulting taxpayers' details on the same day if an urgent request was made.

The committee said: 'The acting Commissioner of Inland Revenue's response is clearly misleading. We are also seriously dismayed that he sought to use the ordinance as an excuse and shift the blame to the Immigration Department.'

The watchdog also urged the ad hoc committee to consult legal experts on whether measures against tax defaulters would infringe rights.

Eric Li Ka-cheung, the non-affiliated legislator who chairs the Public Accounts Committee, said: 'Our most important duty is to set the record straight. I dare not say whether he [Mr D'Souza] had the intention [to deliberately mislead]. But those who listened to what he said would easily come up with a different conclusion.'

Mr Li was referring to his fears that Mr D'Souza's remarks would give the public a wrong impression that the blame for the failure to trace defaulted tax lay with the privacy ordinance.

Although he thought the ordinance had by no means impeded the Inland Revenue Department's work, he declined to endorse a committee report that said Mr D'Souza had been 'economical with the truth'.

Mr D'Souza had said the ordinance would make it more difficult to obtain defaulting taxpayers' details, Mr Li said. 'I think after this incident, officials will be more careful when giving information to the legislature in future because they will face severe criticism [for making any misleading remarks],' he said.

Acting Deputy Commissioner of Inland Revenue Alice Lau Mak Yee-ming said: 'The acting commissioner never had any intention to mislead Legco and the public or shift any blame relating to tax recovery to the Immigration Department.'

She said gaining the addresses of defaulting taxpayers was difficult as residents using identity cards for immigration clearance were exempt from completing arrival or departure cards. Solutions were being discussed with the Immigration Department.