WEDNESDAY, FEBRUARY 29, 1984
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TWO PER CENT TAX RISE PROPOSED
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THE FINANCIAL SECRETARY, SIR JOHN BREMRIDGE, TODAY PROPOSED RAISING DIRECT TAXATION BY INCREASING THE STANDARD RATE OF TAX FROM 15 PER CENT TO 17 PER CENT AND THE PROFITS TAX RATE FOR CORPORATIONS FROM 16.5 PER CENT TO 18.5 PER CENT.
IN HIS BUDGET SPEECH IN THE LEGISLATIVE COUNCIL, SIR JOHN SAID THE INCREASES WERE INEVITABLE IN THE LIGHT OF BUDGET DEMANDS.
+ I HOPE THAT EVEN MY SEVEREST CRITICS WILL AGREE THAT IN THE CIRCUMSTANCES THESE INCREASES ARE MODEST AND THAT THE PROPOSED NEW RATES STILL COMPARE EXTREMELY FAVOURABLY WITH MOST TAX RATES IN ASIA, AND INDEED, INTERNATIONALLY, HE SAID.
HE EXPLAINED THAT A TYPICAL FAMILY OF HUSBAND, WIFE AND TWO CHILDREN WOULD NOT ENTER THE 17 PER CENT THRESHOLD UNTIL SALARIES EXCEEDED $23 300 PER MONTH.
SIR JOHN SAID THAT FOR MANY YEARS, HONG KONG HAS BEEN COMMITTED, WITH CONSIDERABLE SUCCESS, TO A FISCAL POLICY IN RELATION TO DIRECT TAXES WHICH DICTATES THAT OUR SYSTEM SHOULD BE AS PRODUCTIVE OF REVENUE AS POSSIBLE, BUT AT THE SAME TIME BE SIMPLE AND INEXPENSIVE TO ADMINISTER WITH RATES SET AT COMPARATIVELY LOW LEVELS.
+THESE OBJECTIVES WE HAVE ACHIEVED. HONG KONG IS FAIRLY UNIQUE IN HAVING NO UNIFIED INCOME TAX, HE SAID.
+WE HAVE BY ALL NORMAL STANDARDS KEPT OUR EARNINGS AND PROF ITS TAXES LOW. MOREOVER I FIRMLY BELIEVE THAT WE SHOULD CONTINUE TO DO SO.+
+NONETHELESS SOME INCREASES ARE NOW INEVITABLE IN THE LIGHT
OF BUDGET DEMANDS, HE ADDED.
+ INDEED MOST MEMBERS WILL AGREE THAT MODEST INCREASES NOW MUST BE PREFERABLE TO SHARPER INCREASE LATER, AND I NEED TO LOOK MORE THAN ONE YEAR AHEAD. +
SIR JOHN SAID THE STANDARD RATE OF TAX OF 15 PER CENT HAD BEEN IN FORCE SINCE 1966-67 AND THE CORPORATE RATE OF 16.5 PER CENT SINCE 1975-76.
THIS IS TO SAY, OUR STANDARD RATE HAS REMAINED UNCHANGED FOR 18 YEARS AND THE CORPORATE SURCHARGE HAS BEEN AT LOW LEVELS FOR EIGHT YEARS, HE POINTED OUT.
SIR JOHN SAID THAT LAPSE OF TIME WAS NO ARGUMENT FOR INCREASED TAXES, BUT STRESSED THAT OUR PRESENT CIRCUMSTANCES REQUIRED THAT +INCREASES THERE MUST BE+.
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"THE NEW
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