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31. THE LOSS OF REVENUE FOR THE REMAINDER OF THIS FINANCIAL YEAR
IS ESTIMATED AT DOLLARS 250 MILLION. THERE ARE MORE SEVERE
IMPLICATIONS (NEXT WORD UNDERLINED) QUA PROFITS TAX FOR THE FUTURE.
APPLICATIONS HAS BEEN MADE TO THE SECRETARY FOR STATE UNDER
SECTION 8 OF THE EXCHANGE FUND ORDINANCE FOR THIS SUM TO BE
TRANSFERRED TO GENERAL REVENUE ACCOUNT FROM THE EXCHANGE FUND: SUCH
A MOVE MS CONSIDERED TO BE ESPECIALLY JUSTIFIED IN WIEW OF THE FACT
THAT THE ZERO-RATING OF INTEREST TAX WOULD BE INTRODUCED AS PART OF
THE PACKAGE SPECIFICALLY DIRECTED AT STABILISING THE EXCHANGE
RATE. HT IS ALSO ESSENTHAL TO MAINTAIN CONFIDENCE IN BUDGETARY
CONTROL AND DISCIPLINE OF THE DEFICHIT.
ADVICE SOUGHT
32. MEMBERS ARE ASKED TO (NEXT WORD UNDERLINED) ADVISE WHETHER
THE PROPOSAL WITH EFFECT FROM 15 OCTOBER TO ISSUE AND REDEEM
CERTIFICATES OF INDEBTEDNESS ONLY AGAINST US DOLLARS AT A FIXED
RATE SHOULD BE HMPLEMENTED, AND WHETHER SUCH A STEP SHOULD BE
ACCOMPANIED BY THE ZERO-RATING OF INTEREST TAX.
(THE SECRETARY FOR MONETARY AFFAIRS, MR D.W.A. BLYE, THE DEPUTY SECRETARY FOR MONETARY AFFAIRS, MR A. LATTER AND THE DEPUTY SECRERETARY (ECONOMIC SERVICES), DR A. MCLEAN WILL ATTEND BEFORE
THE COUNCIL FOR THE DISCUSSION OF THIS HTEM).
YOUDE
LIMITED
HD/HKD
HDI ERD (HR APPLEYARD)
PS
PS/MR LUCE
PS/PUS
MR LIFFARD
MR DONALD
MR EVANS
COPIES To:-
MR LITTLER TREASURY MR HOLLAND B/ENGLAND
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