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Wednesday, March 13, 1974
Dr. Chung expressed the hope that the government would
look at the issue of 'inflation accounting' with an aim of providing
a more equitable tax policy for the manufacturing companies vis-a-vis
the property companies.
He said that in the past when inflation was low, there might
not be a need for inflation accounting. But with an annual inflation
rate of 15 to 20 per cent the situation had changed.
Ho recalled that some years ago a proposal was made to the
government for changing the depreciation formula from reducing balance
to straight line. The proposal was not accepted at that time.
"Since the Financial Secretary is now anxious to offer encouragement
to manufacturers to re-equip and upgrade their plant and equipment in
the light of changing conditions," he said, "it is hoped that he will
reconsider this particular matter and permit the use of straight line
method for depreciation."
Dr. Chung supported the Financial Secretary's proposal that it
is now time to have a review on the moratorium policy of banking licences.
But he stressed that any newcomer, whether foreign or local,
must be thoroughly scrutinized and be able to fulfil Hong Kong's strict
banking conditions and to meet Hong Kong's high banking standards.
Like some of his unofficial colleagues, Dr. Chung criticised
the proposals on transport tax increases.
/He urged