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'Sledgehammer approach' slated

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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.

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