Tax Reserve Certificates (Amendment) Bill 1999
Amend the Tax Reserve Certificates Ordinance and to make other related amendments.
Enacted by the Legislative Council.
1. Short title and commencement
(1) This Ordinance may be cited as the Tax Reserve Certificates (Amendment) Ordinance 1999.
(2) This Ordinance shall come into operation on a day to be appointed by the Secretary for the Treasury by notice in the Gazette.
2. Interpretation
Section 2 of the Tax Reserve Certificates Ordinance (Cap. 289) is amended, in the definition of "account", by repealing everything after "maintained" and substituting "under section 3(1AA);".
3. Power of Commissioner to issue tax reserve certificates and maintain accounts
Section 3 is amended---
(a) by repealing subsection (1A) and substituting---
"(1A) Where a person---
(a) applies for the purchase of a certificate other than pursuant to the proviso to section 71(2) of the Inland Revenue Ordinance (Cap. 112); or
(b) requests for an entry to be made in accordance with subparagraph (c) of the second paragraph of the "REVERSE OF FORM" of Form 2 of Schedule 1 to the Tax Reserve Certificates (Fourth Series) Rules (Cap. 289 sub. leg.) for the sum and interest mentioned therein,
the person shall make an application to the Commissioner for an account to be maintained in his name except where an account is already being maintained in the name of the applicant.
(1AA) The Commissioner may grant an application under subsection (1A) and the Commissioner shall maintain the account in the name of the applicant on such conditions as he may prescribe by rules.
(1AB) Where an account is maintained in the name of an applicant, the Commissioner shall make an entry for---
(a) each payment received from the applicant for the purchase of a certificate in the circumstances mentioned in subsection (1A)(a); or
(b) the sum and interest pursuant to the request made by the applicant in the circumstances mentioned in subsection (1A)(b),
into the account instead of issuing a certificate for the payment, or for the sum and interest, as the case may be.
(1AC) Where an applicant applies for the purchase of a certificate pursuant to the proviso to section 71(2) of the Inland Revenue Ordinance (Cap. 112), the Commissioner shall issue a certificate upon payment.";
(b) in subsection (1B), by repealing everything before ", unless" and substituting "An entry made in an account in accordance with subsection (1AB) is deemed to be a certificate issued under subsection (1) and".
Tax Reserve Certificates (Fourth Series) Rules
4. Maintaining of accounts
Rule 2B of the Tax Reserve Certificates (Fourth Series) Rules (Cap. 289 sub. leg.) is amended by repealing everything after "section" and substituting "3(1AA) of the Ordinance for any person who has or is likely to have any kinds of income or profits chargeable to tax under the Inland Revenue Ordinance (Cap. 112).".
5. Duty of Commissioner to accept certificates in payment of specified tax
Rule 6 is amended by repealing "face" and substituting "principal".
6. Payment of interest and method of calculation
Rule 7 is amended---
(a) in paragraph (1), by repealing "Simple" and substituting "Subject to paragraph (1A), simple";
(b) by adding---
"(1A) Where---
(a) a certificate is issued on or after the commencement of the Tax Reserve Certificates (Amendment) Ordinance 1999
( of 1999) pursuant to the proviso to section 71(2) of the Inland Revenue Ordinance (Cap. 112); and
(b) during the period commencing on the date of issue of the certificate and ending on the date of the final determination of the objection or appeal against the assessment issued by the Commissioner to which the certificate relates ("the holding period"), two or more rates of interest have been fixed by virtue of paragraph (2)(h),
then the interest on the certificate for the holding period shall be paid and calculated at such rates for the respective periods during which such rates are in force from time to time during the holding period.".
7. Duty to refund balance after payment of tax
Rule 8(3)(a) is amended by adding "be in the same form and" before "bear".
8. Schedule 1 amended
Schedule 1 is amended, in Form 2, in the second paragraph of the "REVERSE OF FORM" ---
(a) by repealing subparagraph (c) and substituting---
"(c) make an entry in an account maintained in the name of the holder named in this Certificate, for the principal sum of $............................. together with any interest payable from the date of issue of this Certificate to the date of the final determination of the objection/ appeal.";
(b) by repealing "單" after "評稅" where it twice appears.
9. Classes of persons for whom the Commissioner may maintain tax reserve certificate accounts
Schedule 2 is repealed.
Consequential Amendments
Inland Revenue Ordinance
10. Provisions regarding payment of tax
Section 71(7)(d) of the Inland Revenue Ordinance (Cap. 112) is amended---
(a) by repealing subparagraph (i)(A) and substituting---
"(A) make an entry in an account in the name of the holder maintained under the Tax Reserve Certificates Ordinance (Cap. 289) for the principal value represented by the certificate or part together with the interest thereon calculated in accordance with the rules from the date of issue of the certificate to the date of the final determination of the objection or appeal; or";
(b) in subparagraph (i)(B), by repealing "at the rate prescribed by" and substituting "calculated in accordance with";
(c) in subparagraph (ii), by repealing "at the rate prescribed by" and substituting "calculated in accordance with".
Explanatory Memorandum
The main purposes of this Bill are---
(a) to amend section 3 of the Tax Reserve Certificates Ordinance (Cap. 289) by repealing subsection (1A) and substituting new subsections which provide that---
(i) a tax reserve certificate will be issued in paper form only to a person who applies for the purchase of a certificate pursuant to the proviso to section 71(2) of the Inland Revenue Ordinance (Cap. 112) (new subsection (1AC));
(ii) in other cases, only an entry will be made in the account maintained in the name of the applicant for payment received for the purchase of a tax reserve certificate instead of issuing a certificate (new subsections (1A) and (1AB));
(iii) the Commissioner of Inland Revenue may maintain accounts upon application and make entries therein (new subsections (1AA) and (1AB));
(b) to amend sections 2 (definition of "account") and 3(1B) consequentially (clauses 2 and 3(b));
(c) to amend the following provisions of the Tax Reserve Certificates (Fourth Series) Rules (Cap. 289 sub. leg.)---
(i) the amendments to rule 2B extend its application to any person who has or is likely to have any chargeable income or profits (clause 4);
(ii) the newly added rule 7(1A) provides that the interest on certificates issued pursuant to the proviso to section 71(2) of the Inland Revenue Ordinance (Cap. 112) shall be calculated at moving rates as may be fixed by the Financial Secretary from time to time (clause 6);
(iii) the amendments to Form 2 of Schedule 1 provide that the holder of the Certificate may request the Commissioner of Inland Revenue to make an entry in the account maintained in his name for any outstanding principal value of the Certificate together with interest (clause 8);
(iv) rules 6 and 8(3)(a) are amended consequentially (clauses 5 and 7);
(v) Schedule 2 is repealed consequent upon the amendments to rule 2B (clause 9);
(d) to amend section 71(7)(d)(i) and (ii) of the Inland Revenue Ordinance (Cap. 112) consequentially (clause 10).
