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THURSDAY, APRIL 3, 1975
MR. HADDON-CAVE ALSO REJECTED A SUGGESTION BY DR. THE HON. CHUNG SZE-YUEN THAT HE TENDED TO OVER REACT TO THE SHORT TERM UPS AND DOWNS IN OUR ECONOMIC PROGRESS.
MR. HADDON-CAVE RECALLED THAT HE HIMSELF HAD STATED ON VARIOUS OCCASIONS DURING THE SURPLUS YEARS THAT THE GOVERNMENT MUST BE CAREFUL NOT TO OVER REACT BY INCREASING ITS ABILITY TO SPEND DEYOND ITS ABILITY TO FINANCE SPENDING IN THE LONGER TERM.
TURNING TO A POINT RAISED BY THE HON. JAMES NU, THE FINANCIAL SECRETARY GAVE AN ASSURANCE THAT THE POTENTIAL SUPPLY OF, AND POSSIBLE DEMAND FOR, LAND FOR HIGH DENSITY LIGHT INDUSTRIES AS WELL AS LOW DENSITY HEAVİER INDUSTRIES OVER THE NEXT FEW YEARS WAS NOW BEING CONSIDERED IN DETAIL.
HE AGREED WITH THE HON. LI FOOK-WO THAT AN INCREASE IN THE STANDARD RATE OF EARNINGS AND PROFITS TAX WAS UNACCEPTABLE AT THIS TIME, AND HOPED TO BE ABLE TO AVOID PROPOSING AN INCREASE IN THE STANDARD RATE UNTIL THE THIRD INLAND REVENUE ORDINANCE REVIEW COMMITTEE HAD REPORTED.
MR. HADDON-CAVE TOLD UNOFFICIALS THAT THE REASON THIS COMMITTEE COULD NOT BE APPOINTED UNTIL. THE MIDDLE OF 1976 WAS THAT IT WOULD BE TOO MUCH FOR THE INLAND REVENUE DEPARTMENT TO HAVE TO DEAL WITH SUCH A COMMITTEE ON TOP OF THE CHANGES INTRODUCED RECENTLY TO THE INLAND REVENUE ORDINANCE.
IN ADDITION, IT WOULD TAKE SOME TIME TO FIND A SUITABLE CHAIRMAN AND A FULL-TIME SECRETARY, HE EXPLAINED. IN PASSING. MR. HADDONCAVE SAID HE DID NOT ENVISAGE THE TERMS OF REFERENCE OF THE REVIEW COMMITTEE BEING CAST DEYOND THE DIRECT TAX FIELD.
HE ALSO GAVE AN ASSURANCE THAT WHEN CONSIDERING ANY FISCAL MEASURES, THE CONSEQUENCES FOR INVESTMENT AND HENCE THE GROWTH RATE OF THE ECONOMY WOULD BE IN THE FOREFRONT OF HIS MIND. LOCAL AND OVERSEAS BUSINESSMEN AND INVESTORS, HE REMARKED, COULD TAKE CONSIDERABLE COMFORT FROM THE GOVERNMENT'S CONSISTENT RECORD IN THIS RESPECT OVER THE PAST 25 YEARS,
ON DIVIDENDS WITHHOLDING TAX AND THE ASSOCIATED TAX ON UNDISTRIBUTED PROFITS, THE FINANCIAL SECRETARY APPEALED TO UNOFFICIAL MEMBERS NOT TO ASK FOR REFINEMENTS WHICH, HOWEVER JUSTIFIED IN THEORY, WOULD IN PRACTICE DE DIFFICULT AND COSTLY TO ADMINISTER AND INTRODUCE UNCERTAINTIES INTO THE LEGISLATION.
AS ADDITIONAL RESOURCES OF REVENUE HAD TO BE TAPPED, PRIORITY MUST BE GIVEN TO THE IMPLEMENTATION OF THE DIVIDENDS WITHHOLDING TAX, AND THE COMMISSIONER OF INLAND REVENUE, HE SAID, WOULD CONCENTRATE THIS YEAR ON AMENDING THE ORDINANCE FOR THIS PURPOSE.
/ON DR. CHUNG'S