HONG KONG LEGISLATIVE COUNCIL
19 July 1989
香港立法局
一九八九年七月十九日
51
sexes and the desirability of allowing wives to maintain independence and privacy in tax matters. Our tax system must be simple but, more importantly, it must be just, fair and equitable. It is not right to compromise our principles just because there may be technical difficulties, or just because it may be somewhat expensive to do so.
Some may argue that actually the inequity which I referred to earlier on has already been adequately addressed or redressed by the working wife allowance introduced a year ago. But it must not be forgotten that the working wife allowance was introduced as, and has always been intended to be, an interim measure only pending implementation of separate taxation. It was never intended to be a substitute for separate taxation. As to whether the working wife allowance sufficiently addresses or redresses the problem, the revenue figures speak for themselves. Under the scheme of working wife allowance, the full year cost to the revenue is in the region of $355 million. If separate taxation were implemented, the full year cost to the revenue would be in a region of $585 million. This means that without separate taxation, married couples in Hong Kong are actually paying $230 million in excess of what they would otherwise have to pay.
Some people believe that the removal of the working wife allowance upon implementation of the separate taxation system would result in a heavier tax burden on some families in the lower income bracket. This in my opinion is a misconception. Under separate taxation, these families would not be worse off than before the introduction of the working wife allowance. In fact they would still be better off. The working wife allowance is not intended to provide relief to lower income families and should not be treated as such. I support the granting of relief to lower income families but I feel that they should more appropriately be sought from increasing the level of personal allowances, as some of my honourable colleagues have suggested, or introduction of some other allowances. The working wife allowance is intended, on an interim basis, to ameliorate an existing inequitable state of affairs. Once that inequity is removed, the allowance cannot justify its existence.
Sir, I welcome the Inland Revenue (Amendment) (No. 3) Bill 1989 which introduces the long-called-for system of separate taxation.
The Bill is short, succinct and to the point. One would have thought that complex issues require complex legislation but this Bill aptly demonstrates that complex laws need not necessarily be complex. In this regard, may I take this opportunity of congratulating the draftsman for his skill and fine work.