The Inland Revenue (Amendment) (No 2) Bill 2009, which aims to smooth the Board of Review's operation and improve the Inland Revenue Ordinance's administration, has been gazetted.

The bill, to be introduced into the Legislative Council on June 24, introduces some technical amendments to the ordinance and consequential amendments to the Tax Reserve Certificates Ordinance.

A number of minor textual amendments to the Inland Revenue Ordinance have also been proposed to achieve consistency or remove spent provisions.

To smooth the board's operation, it is empowered to correct clerical mistakes in its written decisions on tax appeals.

The chairman of the board - rather than the Chief Secretary - is to nominate members of its hearing panels, to reflect its independence.

A retired member of the board will be allowed to handle a case that he or she has handled before in certain circumstances.

If an appeal is heard by both the chairman and a deputy chairman of the board, it is stated clearly only the presiding officer, either the chairman or deputy chairman, has the casting vote.

Administrative enhancements

The bill also proposes other technical amendments to improve the ordinance's administration. For profits tax, interest payment on capital expenditure incurred in purchasing machinery for research and development, prescribed fixed assets or environmental protection machinery will be allowed to be explicitly deductible under profits tax.

For salaries tax and tax under personal assessment, the Inland Revenue Department is empowered to make additional assessments on salaries tax and tax under personal assessment, within two years after the revocation of the home loan interest deduction claims if the revocation is made after the six-year statutory period.

For property tax, the department is empowered to make a property tax assessment on a person who receives rent on any common parts of any land or building.

The bill also states the period within which prosecution of the department's staff breaching secrecy provisions may be made is to be extended from six months to six years.

It also enables the department to refund to a taxpayer the balance remaining in his tax reserve certificates account without requiring the taxpayer to return the tax reserve certificate.