WEDNESDAY, FEBRUARY 24, 1982
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COMPARED WITH TAX LIABILITY OF OTHER COUNTRIES IN THIS REGION AND UK, TAX PAYABLE IN HONG KONG IS THE LOWEST. FOR EXAMPLE, A MARRIED COUPLE WITH NO CHILDREN EARNING $60 000 A YEAR WILL PAY $200 IN TAX IN HONG KONG WITH AN EFFECTIVE TAX RATE OF 0.3 PER CENT WHILE THEIR TAX LIABILITY IN SINGAPORE WILL BE $4 341 (7.2% OF THEIR INCOME)= $6 008 IN MALAYSIA (10%) AND $11 052 IN UK (18.4%).
IF APPROVED, THE NEW ALLOWANCES WILL BE APPLICABLE TO FINAL SALARIES TAX ASSESSMENTS AND ALSO FOR PERSONAL ASSESSMENTS FOR 1981-82 AND TO PROVISIONAL SALARIES TAX FOR 1982-83.
THE COST TO THE REVENUE IN 1982-83, AFTER ALLOWING FOR THE TWO-INSTALMENT SYSTEM FOR THE PAYMENT OF PROVISIONAL SALARIES TAX, WILL BE $509 MILLION, EQUIVALENT TO A 22 PER CENT OF THE ESTIMATED REVENUE FROM THE PERSONAL TAXATION. THE COST IN A FULL YEAR IS ESTIMATED TO BE AT $316 MILLION AT PRESENT LEVELS OF CHARGEABLE
INCOME.
NOTE TO EDITORS,
EXAMPLES OF SALARIES TAX PAYABLE UNDER THE PROPOSED CONCESSIONS ARE SHOWN IN APPENDICE E AND F OF THE FINANCIAL SECRETARY'S BUDGET SPEECH THE INCOME LEVELS AT WHICH SALARIES TAXPAYERS ENTER THE STANDARD RATE ZONE ARE IN APPENDIX G WHILE THE COMPARISON OF TAX PAYABLE IN HONG KONG, SINGAPORE, MALAYSIA AND UK IS CONTAINED IN APPENDIX H.
CONCESSIONS ON INTEREST TAX EFFECTIVE TOMORROW
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WITH EFFECT FROM TOMORROW (THURSDAY), INTEREST PAID OR CREDITED ON FOREIGN CURRENCY DEPOSITS PLACED WITH LICENSED BANKS AND REGISTERED AND LICENSED DEPOSIT-TAKING COMPANIES WILL BE EXEMPT FROM INTEREST TAX WHILE THE INTEREST TAX ON HONG KONG DOLLAR DEPOSITS WITH THESE FINANCIAL INSTITUTIONS WILL BE REDUCED FROM 15 TO 10 PER CENT UNDER AN ORDER SIGNED BY THE GOVERNOR THIS (WEDNESDAY) MORNING.
THESE CONCESSIONS WERE ANNOUNCED BY THE FINANCIAL SECRETARY, THE HON JOHN BREMRIDGE IN HIS BUDGET SPEECH TODAY,
MR BREMRIDGE SAID INTEREST ON OTHER FORMS OF INDEBTEDNESS SUCH AS MORTGAGES AND PRIVATE LOANS WOULD CONTINUE TO ATTRACT LIABILITY TO TAX AT THE STANDARD RATE OF 15 PER CENT, OR 16-1/2 PER CENT IN THE CASE OF THE PROFITS OF CORPORATIONS WHICH RECEIVED SUCH INTEREST AS PART OF THEIR TRADING PROFITS.
THE COST TO REVENUE OF EXEMPTING FOREIGN CURRENCY DEPOSITS AND OF REDUCING THE INTEREST RATE ON HONG KONG DOLLAR DEPOSITS IS ESTIMATED TO BE $400 MILLION IN 1982-83, SUBJECT ALWAYS TO THE INFLUENCES WHICH VARIATIONS IN INTEREST RATES FROM TIME TO TIME AND IN THE VOLUMES OF DEPOSIT BUSINESS TRANSACTED MIGHT HAVE ON REVENUE YIELDS,
MR BREMNEDGE