Q: What are the consequences of not paying tax on time?
A: Section 71(1) of the Inland Revenue Ordinance (Cap. 112) provides that tax charged under the provisions of this Ordinance shall be paid in the manner directed in the notice of assessment on or before a date specified in such notice. Any tax not so paid shall be deemed to be in default.
If the first installment is not paid by the date specified on the notice of assessment, the second installment will become immediately due. The entire balance of the total tax payable in the notice of assessment remaining unpaid shall be deemed to be in default and will be immediately recoverable.
The Commissioner of Inland Revenue will initiate recovery actions [including imposition of 5% surcharge on the entire balance of the demand notice, issue of recovery notice to third party and initiation of legal action, etc] as authorized by Part XII of the Inland Revenue Ordinance for recovering the total outstanding amount.