Taxpayers understate $4.47b of earnings, profits

PUBLISHED : Saturday, 11 March, 2006, 12:00am
UPDATED : Saturday, 11 March, 2006, 12:00am

Taxpayers have understated $4.47 billion of earnings and profits to the Inland Revenue Department up to February 28 in the current financial year, it emerged yesterday.

The figure was reported in the Inland Revenue Department's reply to a budget-related question posed by legislator Jeffrey Lam Kin-fung of the Liberal Party.

The figure was significantly lower than that recorded in the last fiscal year. In 2004-05, the department uncovered a total of $7.5 billion understated earnings and profits.

In 2003-04, the total of understated earnings and profits stood at $3.8 billion. But the number of tax avoidance cases completed so far was on a par with last year's, with 191 in the 11 months of the current financial year compared with 213 for the whole of last year.

In a separate reply to Democrat Sin Chung-kai, the department also said that it would tackle the work arising from the goods and services tax consultation through internal staff redeployment without additional resources. However, the Financial Services and Treasury Bureau revealed that it has hired a financial consultant for $7.5 million to conduct a study on the proposed tax. A further $4.8 million will go towards printing and other marketing and publicity expenses for the consultation exercise.

Treasury branch staff will also help in the consultation exercise, the government said.

The Transport Department will take on eight more staff to handle the personalised number plate scheme, which is expected to start in the second quarter.

The extra staff will cost almost $2.5 million in the next financial year while about $6 million a year is needed to administer the scheme.

These are among the record 2,414 written questions submitted by legislators about expenditure estimates in the government's budget for the 2006-07 fiscal period.