Privacy fears over proposed law

Legislators have expressed concern that the proposed law to allow the government to send details on individuals suspected of evading tax to authorities abroad will lead to privacy invasion and data abuse.

Their concerns came as officials introduced the proposed legislative amendment at a meeting of the Legislative Council's financial affairs panel yesterday.

The measures will expand the Inland Revenue Department's power to provide overseas authorities with details on a taxpayer or related person.

They will also enable the city to adopt the latest international standards for exchange of information on the comprehensive avoidance of double taxation agreements, also known as CDTAs.

'Will there be a special mechanism to assess if the requests made [by overseas authorities] are reasonable and legal?' Civic Party lawmaker Ronny Tong Ka-wah asked. 'For example, if the US passes a law which requires everyone to pay it taxes, and if it asks us for information based on that, do we need to provide it with data on every Hongkonger?'

Other legislators, including Jeffrey Lam Kin-fung and Chan Kin-por, also expressed concerns.

But undersecretary for financial services and the treasury Julia Leung Fung-yee said any exchange-of-information agreement would restrict the other party to requesting data that was necessary and relevant.

Inland Revenue Commissioner Alice Lau Mak Yee-ming said only information on specific cases and on certain types of tax, such as income tax, could be provided.

Hong Kong's tax rules fell under the spotlight amid moves to have it declared a tax haven in the Group of 20 final communique. That outcome was apparently averted when President Hu Jintao refused to countenance the inclusion of a list of tax havens.

The city has already signed CDTAs with the mainland, Thailand, Belgium, Luxembourg and Vietnam.