THURSDAY, APRIL 12, 1979
14
MR. HADDON-CAVE EMPHASISED THAT AS AN INDICATION OF THE AMOUNT OF TAX THEY PAY, THE AVERAGE TAX PAID IN RESPECT OF THE YEAR OF ASSESSMENT 1976-77 BY TAXPAYERS AT THE LOWER END OF THIS RANGE WAS ABOUT $900 A YEAR, OR JUST BELOW 2-1/2 PER CENT
OF THE IR ANNUAL INCOMES- AND THE AVERAGE TAX PAID BY TAXPAYERS AT THE UPPER END OF THE RANGE IS $7,500, OR ABOUT 10 PER CENT OF THE IR ANNUAL INCOMES.
+ IT CANNOT BE DENIED THAT THESE PERCENTAGES ARE VERY LOW INDEED BY WORLD STANDARDS, HE STRESSED,
+ IN ADDITION, THE PROPOSED REDUCTION IN THE CLAW-BACK' FACTOR FROM 15 PER CENT TO 10 PER CENT AND THE ABOLITION OF THE 30 PER CENT MARGINAL RATE, TAKEN TOGETHER, NOT ONLY WILL REDUCE THE EFFECTIVE RATE OF TAX FOR THE GENERALITY OF TAXPAYERS, BUT ALSO WILL LIFT THE POINT AT WHICH THE STANDARD RATE APPLIES, THEREBY STRETCHING AND EVENING OUT THE PROGRESSION OF EFFECTIVE RATES TO THE BENEFIT OF THE 'CLASS IN THE MIDDLE',+ MR. HADDON-CAVE POINTED OUT.
THE FINANCIAL SECRETARY SAID THAT GIVEN THE PRESENT RATE OF SALARIES TAX OF 15 PER CENT, TO SINGLE OUT THE +SANDWICHED SOCIETY FOR PREFERENTIAL TAX TREATMENT WOULD UPSET THE INTERNAL RELATIVITY BETWEEN THIS CLASS OF TAXPAYERS AND OTHER CLASSES, THEREBY DISTORTING THE EVEN PROGRESSION OF EFFECTIVE RATES.
REGARDING THE HON. HILTON CHEONG-LEEN'S BELIEF THAT MANY MORE PEOPLE ARE CAPABLE AND WILLING TO PAY INCOME TAX, MR. HADDON- CAVE REPLIED: ALL AVAILABLE EVIDENCE INDICATES, REGRÉTABLY, THAT THOSE WHO ARE CAPABLE MAY NOT BE ALL THAT WILLING.+
FOR EXAMPLE, HE SAID, IN 1977-78 THERE WERE ABOUT
143,000 CASES WHERE THE COMMISSIONER OF INLAND REVENUE HAD TO IMPOSE PENALTIES FOR LATE PAYMENTS AND FOR SUCH NON-COMPLIANCE WITH THE LAW AS FAILURE TO FILE RETURNS AND FILING INCORRECT RETURNS.
IN ADDITION, THERE WERE SOME 1,807 SUCCESSFUL PROSECUTIONS THROUGH THE COURTS FOR VARIOUS OFFENCES. I AM HAPPY TO REPORT THAT THE TOTAL YIELD FROM THESE PROSECUTIONS WAS ALMOST $25 MILLION, WHICH WAS ROUGHLY THE COST OF RADIO TELEVISION HONG KONG IN THAT YEAR OR NEARER HOME, HALF OF THE INLAND REVENUE DEPARTMENT,+ MR. HADDON-CAVE SAID.
ABOLISHING DUTY ON LOCAL CHINESE SPIRITS
ON THE HON. LEUNG TAT-SHING'S SUGGESTION THAT CONSIDERATION BE GIVEN TO ABOLISHING DUTY ON LOCALLY PRODUCED CHINESE SPIRITS, MR. HADDON-CAVE SAID THERE WAS ALREADY A PREFERENTIAL RATE OF DUTY ON ALL NON-EUROPEAN TYPE SPIRITS.
+THERE IS A FURTHER PREFERENTIAL RATE ON THOSE OF HONG KONG ORIGIN,+ MR. HADDON-CAVE ADDED.
+THUS THE RATE OF DUTY (AT $8.75 PER GALLON) ON CHINESE-TYPE SPIRITS OF HONG KONG ORIGIN IS ALREADY VERY LOW COMPARED WITH THAT ON IMPORTED EUROPEAN-TYPE SPIRITS OF SIMILAR STRENGTH (AT $95.50 A GALLON).+
/IN POINTING