WEDNESDAY, MARCH 24, 1976
APPOINTMENT OF THIRD INLAND REVENUE ORDINANCE REVIEW COMMITTEE WELCOMED
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THE TAX SYSTEM IN HONG KONG SHOULD CONTINUE TO BE INDUCIVE TO FOREIGN INVESTMENT, BE SIMPLE AND EFFECTIVE, INEXPENSIVE TO OPERATE, NOT UNREASONABLY UNFAIR AND EASY TO ADMINISTER, DR. THE HON. CHUNG SZE-YUEN TOLD THE LEGISLATIVE COUNCIL TODAY.
IN OPENING THE RESUMED BUDGET DEBATE, DR. CHUNG SAID THIS WAS THE VIEW OF THE UNOFFICIAL MEMBERS OF THE COUNCIL.
HE RECALLED THAT THE FINANCIAL SECRETARY HAD REVEALED IN HIS BUDGET SPEECH THAT THE UNOFFICIAL MEMBERS HAD EXPRESSED DISSATISFACTION WITH BOTH THE UNDERLYING PRINCIPLES AND THE DETAILS OF THE PROPOSED DIVIDENDS WITHHOLDING TAX AND THE UND ISTRIBUTED PROFITS TAX.
+ IT IS TRUE THAT THE MAJORITY OF UNOFFICIAL MEMBERS DO OBJECT TO THE PRINCIPLES OF THESE PARTICULAR TYPES OF TAXATION, BUT TO BE FAIR TO THEM, I AND, TO THE BEST OF MY KNOWLEDGE, THEY ARE NOT OPPOSED TO THE PRINCIPLE OF RAISING MORE TAXEŠ, IF SUCH A COURSE IS NECESSARY AND DESIRABLE,+ HE SAID.
DR. CHUNG WELCOMED THE APPOINTMENT OF THE THIRD INLAND REVENUE ORDINANCE REVIEW COMMITTEE, BUT HE HAD DOUBTS ON THE ADEQUACY OF THE COMMITTEE'S TERMS OF REFERENCE.
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HE FELT THAT THE AMOUNT OF TAX REQUIRED TO BE RA SED EACH YEAR FOR THE NEXT FIVE OR TEN YEARS WAS OF UTMOST IMPORTANCE
IN CONSIDERING AND REVIEWING THE PRESENT HONG KONG TAX SYSTEM OF PROFITS AND OTHER FORMS OF INCOME, AND SHOULD BE INC..UDED IN THE COMMITTEE'S TERMS OF REFERENCE.
UNLESS THE GOVERNMENT WOULD SPECIFY THE RANGE OF TE PROJECTED AMOUNTS OF EARNINGS AND PROFITS TAX REQUIRED. EACH OF THE NEXT FIVE TO TEN YEARS, DR. CHUNG SAID HE WOULD FAND IT DIFFICULT, IF HE WAS A MEMBER OF THE COMMITTEE, TO ASSESS THE NEED AND PRIORITY FOR OTHER FORMS OF EARNINGS AND PROTS TAX TO BE INTRODUCED IN HONG KONG.
HE SAID ABOUT 75 PER CENT OF THE 200,000 BUSINESS ESTABLISHMENTS REGISTERED IN HONG KONG MADE EXTENSIVE USE OF THE INFRASTRUCTURE, BUT PRACTICALLY PAID NO TAXES.
+SOME OF THESE BUSINESS FIRMS MAKE NO PROFIT NOT BECAUSE THEY ARE UNABLE TO MAKE MONEY BUT SIMPLY THEY DON'T WANT TO MAKE ANY PROFIT. SINCE OUR INDIRECT TAXATION IS MINIMAL, THESE FIRMY ARE TAKING ADVANTAGE OF THE TAX-PAYERS IN HONG KONG.V
ON THE QUESTION OF FINANCING CAPITAL EXPENDITURE, HE SAID IT WAS LIEVITABLE THAT HONG KONG MUST CONTINUE TO DEVELOP ITS INFRASTRITURE SUCH AS TRANSPORT, COMMUNICATION, WATER AND POWER SO IS TO IMPROVE BOTH THE COMMERCIAL /INDUSTRIAL EFFICINNCY AND THE TANDARDS OF LIVING.
UNTIL