A MOVE to close loopholes to prevent people avoiding tax by establishing personal service companies was criticised by legislators as ineffective.
Peter Wong Hong-yuen, who represents accountants in the legislature, described the measures as ''using a sledgehammer to crack a nut''.
He said members should be aware the taxpayer had the right to arrange personal financial affairs to pay the minimum tax within the existing legal parameters.
In many instances, service companies - often used to take advantage of tax concessions for employment privileges and fringe benefits - might be legitimate in their dealings, he said.
Services companies helped to attract highly skilled professionals by offering employment contracts in a tax-efficient manner, he said.
''We resent the implication that the use of these companies to minimise tax is in any way illegal,'' he said.