LAWS are to be introduced to stop people avoiding tax by setting up service companies. Professional groups are being consulted on how the legislation should be formulated. There might be more than 4,000 cases of service companies being used to avoid tax, with the amount involved up to $400 million or $500 million a year, Commissioner of Inland Revenue Anthony Au Yeung Fu told the Legislative Council finance, taxation and monetary affairs panel meeting yesterday. Mr Au Yeung said it was difficult to prove such avoidance in existing law. United Democrat legislator Albert Chan Wai-yip was worried people would simply come up with new ways to avoid tax. Deputy Secretary for the Treasury, Stephen Selby, said there could never be a mechanism to eliminate tax avoidance.