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Wednesday, February 24, 1971
"1970/71 has indeed been very like 1962/63 in some respects. In
addition to substantial increases in recurrent revenue, largely under the
influence of an exceptional advance in economic activity, land sales played
a major role in raising total revenue in both years, about doubling to $208
million in 1962/63, and more than doubling to #258 million this year,"
Of the Salaries and Profits Tax, Sir John said the yield reflected
the results of the previous financial year, and it was clear that that year had
been economically even better than had been supposed. The estimate had been
revised upwards by $59 million to $749 million, a figure $126 million higher
than the actual yield in 1969-70.
Part of this increase continued to arise from the growth of salaries.
"When we introduced a new allowance this year to relieve from tax
anyone liable to pay less than $100, we hoped to reduce very substantially
the number of active salaries tax files. Instead, the number has gone up
by 9,000," Sir John said.
The yield of duties had also increased significantly, except for
tobacco, which was likely to have fallen slightly, due to a number of complex
reasons such as fluctuations in the timing of payment of drawback on exports,
and a transfer of consumption from imported to Hong Kong-manufactured cigarettes.
Sir John told the Council it was not possible to say what effect, it
any, the advance of medical knowledge of the dangers of tobacco smoking had had.
But he thought it could be said, with Hong Kong's relatively low rate
of duty, the Colony would not suffer such serious fiscal consequences as many
other communities were there to be, for any reason, a significant reduction
in smoking.
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