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MHY 93 08:18
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CONFIDENTIAL
3.
1.
the
The Governor's terms and conditions of service
were proposed in his formal letter of appointment (Annex B) and agreed by him before his arrival in Hong Kong.
The letter states that the Governor is expected to serve
until 30 June 1997 and that the salary for his appointment will be tax free. Like his predecessors, present Governor receives a salary which is fixed at 125% of that of the Chief Secretary and a non-accountable
entertainment allowance. Unlike his predecessors, the Governor is not a member of the Diplomatic Service and was therefore appointed on contract terms. He has no entitlement to a Diplomatic Service pension but like other contract appointments is entitled to a contract
gratuity. This is also tax exempt. The Governor is aligible for a variety of benefits normally available to civil service employees, including annual leave passages, education allowances and so forth, payable in cash or in
kind.
Tax Position of Governors elsewhere
8.
When compared to Governors elsewhere, similar exemptions are found in other Commonwealth countries and dependent territories of the Commonwealth. Australia exempts the official salary of the
Governor-General.
For instance,
The Governor of Gibraltar is also
exempted from tax, as are other Governors paid by dependent territory administrations. However, where Governors are paid by HMG, they pay UK income tax (examples include Falkland Islands, British Virgin
Islands and Anguilla).
CONFIDENTIAL
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