TAX CONCESSIONS
122.
Turning now to tax concessions, I propose a modest
reduction in the standard rate of tax, a reduction in the rate
of profits tax applicable to corporations, increases in personal
and child allowances, a revision in the rates of estate duty,
and an increase in the exemption limit for gifts under the
Estate Duty Ordinance. In addition, I propose to introduce
amendments to the Inland Revenue Ordinance both to simplify the
assessment to salaries tax of those employees who, in any year,
render services both within and outside Hong Kong, and to combat specific tax avoidance arrangements.
Personal Taxation
123.
(47)
For personal taxation, I propose
First, to reduce the standard rate from 17% to 16 1/2%.
Second, to combine the existing basic and additional
personal allowances to form the new basic allowance, and to set the additional personal allowance at $5,000 for single persons, and $10,000 for married persons.
Taken together, the new basic allowance plus the
additional personal allowance will total $34,000 for single persons and $70,000 for married couples; below these income levels there will be no liability to tax.
The new allowances at their maximum levels will be nearly 17% higher than the present combined basic and additional personal allowances (47).
Under the provisions of section 42B (1) of the Ordinance, the present basic and additional allowances are
Basic Allowance
Additional Allowance
Total
Single Married
$20,500 $41,000
$ 8,500
$19,000
$29,000 $60,000
37
/Third