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"While the Queen was not liable to pay any income,
capital gains or inheritance tax in the past, the Governor
has always been subject to all forms of taxation except for
excise duty and salaries tax on his official emoluments ad
Governor of Hong Kong.
"The element that the Governor's salary will be
tax free is clearly set out in his Letter of Appointment.
Such a contractual condition is absent in the case of the
Queen."
The panel has also considered the suggestion that
the Governor should nonetheless pay salaries tax without
any compensation and has conaluded:
package.
"This would mean a reduction in his remuneration
We do not consider this suggestion fair given
that the Governor has accepted his appointment on the terms
offered to him."
Nor does the panel support the suggestion that the
Governor should pay salaries tax but be compensated by a
pay rise to restore his net income:
"This would be an artificial means to achieve the
same remuneration package which would not in effect result
in any material difference."