UMELCO
HRKI06/1
RECEIVED
UP
DRAFT SPEECH BY HON MRS RITA FAN,
LEGISLATIVE COUNCIL 30.4.1986-
DES
INDEX
Inland Revenue (Amendment) (No.2) Bill 1986
13 MAY 1986
MISTRY
Action Taken
ABBI
Sir,
I witnessed with great pleasure the moving of the Second Reading of the Inland Revenue (Amendment) (No.2) Bill 1986 by the
Clause 2 of this Bill Financial Secretary on 16 April 1986.
repeals the amendments made in 1984 to the Inland Revenue Ordinance regarding the taxation of off-shore interest earned by
There is no organizations other than financial institutions.
doubt that this move by the Government is welcomed by the business community, both locally and internationally.
I have been exercised by this matter ever since the budget debate in 1984. At that time I was already concerned by the Financial Secretary's proposal to levy tax on interest earned- overseas which appeared to be incompatible with the spirit of Hong Kong tax system, namely, taxing only profits arising in or derived from Hong Kong. I felt that this could cause misunderstanding by both local and overseas investors that Hong Kong might deviate from the territorial source based tax system. This was why I withheld my support for the Inland Revenue (Amendment) Bill 1984. By March 1985, numerous representations against the enacted Bill was received by the Government and by UMELCO, and these representations from the public contained valid reservations. Again, I reflected the public's view on the subject in this Council and reiterated the importance of a simple tax system as well as expressing reservation on anti-avoidance legislations
In October 1985, which may cause complex and confusing tax laws. the UMELCO Ad Hoc Inland Revenue Review Panel recommended that the Government should restore the status quo prior to the 1984 Amendment Ordinance regarding off-shore interest earned by non-financial institutions. This recommendation was endorsed by
UMELCO and had since been communicated to the Government.
UMELCO!
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