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WEDNESDAY, OCTOBER 17, 1979
INLAND REVENUE (AMENDMENT) (NO. 7) BILL
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A BILL SEEKING TO RAISE FROM 7.75 PER CENT TO 9.25 PER CENT THE CEILING ON THE FINANCIAL SECRETARY'S AUTHORITY TO SPECIFY THE RATE OF EXEMPTION FROM INTEREST TAX WAS INTRODUCED IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).
MOVING THE SECOND READING OF THE INLAND REVENUE (AMENDMENT) (NO. 7) BILL, THE ACTING CHIEF SECRETARY, THE HON, PHILIP HADDON- CAVE, SAID THE BILL HAD BEEN BROUGHT INTO FORCE ON AUGUST 21 UNDER A REVENUE PROTECTION ORDER AND ON THE SAME DAY, HE HAD SIGNED A NOTICE SPECIFYING 9.25 PER CENT AS THE RATE OF EXEMPTION FOR THE TIME BEING.
MR. HADDON-CAVE POINTED OUT THAT IN LINE WITH THE INCREASE IN THE INTEREST RATE ON SAVINGS ACCOUNTS, THE CEILING HAD BEEN RAISED FROM FIVE PER CENT TO 7.5 PER CENT IN JANUARY THIS YEAR TO 7.75 PER CENT IN APRIL AND TO 9.25 PER CENT IN AUGUST,
HE EXPLAINED THAT THE INLAND REVENUE ORDINANCE PROVIDES FOR EXEMPTION FROM TAX OF INTEREST PAYABLE BY THE GOVERNMENT BY LICENSED BANKS AND BY CERTAIN SPECIFIED PUBLIC UTILITIES, PROVIDED THAT THE RATES OF INTEREST DO NOT EXCEED THE PERCENTAGE RATE SPECIFIED BY THE FINANCIAL SECRETARY, FROM TIME TO TIME, BY NOTICE IN THE GAZETTE.
+THIS PERCENTAGE RATE HAS, FOR MANY YEARS, BEEN VARIED TO ACCORD WITH THE RATE PAID BY BANKS ON SAVINGS ACCOUNTS, WHICH IS ALSO THE RATE PAID ON ITS SURETY DEPOSITS BY ONE OF THE POWER COMPANIES,+ MR. HADDON-CAVE SAID.
+ IF THIS INTEREST WERE NOT EXEMPTED, LARGE NUMBERS OF SMALL DEPOSITORS AND CONSUMERS OF POWER WOULD BECOME LIABLE TO TAX, WHICH THE BANKS AND THE UTILITY COMPANIES WOULD BE OBLIGED TO DEDUCT AND ACCOUNT FOR AND THERE WOULD, SUBSEQUENTLY, BE A LARGE NUMBER OF CLAIMS FOR REFUNDS UNDER THE PROVISIONS FOR PERSONAL ASSESSMENT, + HE ADDED,
THE DEBATE ON THE MOTION WAS ADJOURNED.
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