MONDAY, JANUARY 10, 1983
LEASING INDUSTRY'S ROLE STRESSED BY BREMRIDGE
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THE EQUIPMENT LEASING INDUSTRY CAN PROVIDE A PARTICULARLY USEFUL SERVICE FOR HONG KONG'S MANUFACTURING SECTOR WHICH MUST COPE WITH RAPID CHANGES IN CONSUMERS' TASTE EVEN IN THE FACE OF CURRENTLY DEPRESSED INTERNATIONAL TRADE, THE FINANCIAL SECRETARY, MP JOHN BREMRIDGE, SAID THIS (MONDAY) MORNING.
BECAUSE OF THESE CHANGES, OVERSEAS DEMAND FOR PARTICULAR LINES OF PRODUCTS CONTINUES TO BE VOLATILE, MR BREMRIDGE SAID, IN OPENING THE FIRST WORLD LEASING CONVENTION BEING HELD IN HONG KONG.
+TO SATISFY SUCH VOLATILITY IS NOT EASY, PARTICULARLY WHEN COSTLY EQUIPMENT IS REQUIRED TO MANUFACTURE THE PRODUCTS CONCERNED.
+ IN THESE CIRCUMSTANCES I BELIEVE THE EQUIPMENT LEASING INDUSTRY CAN PROVIDE A PARTICULARLY USEFUL SERVICE BY HELPING OUR MANUFACTURERS TO MAINTAIN THEIR COMPETITIVE EDGE WHILE MINIMISING THE FINANCIAL BURDEN ARISING FROM PURCHASING EQUIPMENT WHICH QUICKLY BECOMES OBSOLETE, AND FROM THE PROBLEM OF INCREASING BANK DEBT, MR BREMRIDGE SAID.
EQUIPMENT LEASING COULD ALSO CONTRIBUTE TO THE CONSTRUCTION INDUSTRY ENGAGED IN HONG KONG'S CONTINUOUS INFRASTRUCTURAL BUILD-UP, HE SAID.
+AND I AM SURE THAT THE INDUSTRY ALSO FEATURES PROMINENTLY IN OUR FAST EXPANDING TERTIARY SERVICES SECTORS, NOT LEAST IN COMPUTER LEASING, HE SAID.
ANOTHER FAVOURABLE FACTOR FOR THE DEVELOPMENT OF EQUIPMENT LEASING IS HONG KONG'S FISCAL ENVIRONMENT WITH CORPORATE PROF IT TAX OF ONLY 16-1/2 PER CENT, HE POINTED OUT.
OF PARTICULAR RELEVANCE, HE ADDED, IS THE GENEROUS ALLOWANCE FOR PROFIT TAX PURPOSES OF DEPRECIATION FOR PLANT AND MACHINERY.
CURRENTLY, THE ALLOWANCE FOR THE INITIAL YEAR WHEN THE INVESTMENT IS MADE IS 55 PER CENT, HAVING BEEN RAISED TWICE IN THE PAST TWO YEARS.
+WITH AN ANNUAL ALLOWANCE OF, SAY, 30 PER CENT ON THE BALANCE, THIS MEANS THAT IN THE YEAR OF ACQUISITION 68.5 PER CENT OF THE VALUE OF THE PLANT AND MACHINERY IS DEDUCTIBLE FOR PROF IT TAX PURPOSES.
+1 HOPE THESE GENEROUS ALLOWANCES, IN DIRECTLY BENEFITING THE INDUSTRY AS THE LESSOR, WILL ALSO BRING SUBSTANTIAL BENEFITS FOR THE LESSEE,+ MR BREMRIDGE SAID.
HE IDENTIFIED THE HONG KONG GOVERNMENT'S LONG-STANDING COMMITMENT TO A FREE ENTERPRISE SYSTEM AS THE THIRD FAVOURABLE FACTOR.
SWE MAINTAIN