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Degree of proof
The Inland Revenue Ordinance empowers an assessor to make
assessments on taxpayers according to his judgment. Such judgment is
normally based on a tax return or in some cases in the absence of a tax
return. Although the Revenue is not obliged to disclose how the judgment is
made, the assessor must exercise his judgment honestly.
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In the case Mok Tsze Fung versus CIR,
HKTC 166, the judge said, “So long as the assessor, or Commissioner, does
not act capriciously or dishonestly, his assessment, being made according to
his judgment, cannot be disturbed except upon the taxpayer bearing and
discharging the onus of proof.”
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Given an assessment made by an assessor honestly, if a
taxpayer disagrees, he will have to
lodge an objection in accordance with Section 64
of the Ordinance. To substantiate his objection, he must adduce evidence
to prove that the assessment is either incorrect or excessive. This burden
of proof on the taxpayer is stipulated by Section 68(4) of the Ordinance ---
indeed it is heavy.
A
tax dispute (other than a prosecution) is a civil proceeding --- and so the degree
of proof required is on "a balance of probabilities". The criminal degree-of-proof,
namely “beyond reasonable doubt”, has no place in determining objection
cases.
On the other hand, prosecutions, particularly those concerning
tax
evasions, belong to criminal proceeding. In such a case, the degree of proof is “beyond
reasonable doubt” which is much more stringent than “on a balance of
probabilities” as required in objection cases. To put it in simple words, a crime is an offence against the public at
large and the penalty on conviction includes imprisonment. Before taking
criminal prosecutions, the Revenue must collect sufficient evidence to prove that the
taxpayer has deliberately committed an offence (for example theft of public
revenue or cheating the IRD by false information) beyond reasonable doubts. |
