Our lawmakers are currently discussing two draft laws concerning the regulation of leasing activities. The first law will set a new framework for the development of those activities. The second one defines the tax benefits for the sector. That is an indication that the business is deemed as very relevant. Not all business activities deserve that general rules for their operation are discussed in parallel with the granting of unique tax benefits. That would recommend that a detailed justification of the role of the sector in the development of the economy as a whole should be put forward.
Indeed, the presumed importance is undoubtedly implied in the justification note that accompanied the draft sent by the government to the Legislative Assembly. The objective is to bring in more leasing companies. Namely, by ‘offering a broad scope for their development,’ thus ‘attracting to Macau more companies from Mainland China and abroad.’ Such a (very) general objective is presumed not possible within the framework of the existing law, deemed as unable ‘to satisfy needs of the sector development’ at present.
One would expect some effort, however limited, to explain why this is so. In particular: what aspects of the existing law have become inadequate; which new needs can it not cater for; how does the new law expect to ‘solve’ the perceived limitations, just to give a few examples. Unfortunately, the only thing we get is just the general statement that ‘to follow the social and economic development it is necessary to revise and renovate the legal regimen.’ It is an assertive statement, but it adds little, if anything, to our understanding of how this might be so.
The justification for the tax benefits does not take us much further. We get a few more details about the rationale of the new framework, justified for the ‘diversification’ of the economy and its financial services. Overall, then, we can say the rationale is broadly stated as if it was self-evident, and no need is felt to explain its foundations.
Some lawmakers have raised the possibility of some of the benefits, as defined in the current draft, might be abused. That might happen, in particular in the acquisition of buildings. Those are pertinent questions and should be carefully considered. Lest the ‘renewal’ of the leasing sector turns out, in the end, into another channel for real estate operations and tax avoidance.
