WEDNESDAY, JUNE 13, 1984
+ IT IS NOT DIFFICULT TO ENVISAGE THAT UNLESS SOME CONCESSION IS MADE IN THIS AREA, IT IS LIKELY THAT NEW FUNDS WILL NOT BE ESTABLISHED IN HONG KONG AND MANY EXISTING FUNDS WILL BE FORCED TO RELOCATE OUT OF HONG KONG, HE SAID.
HE POINTED OUT THAT THIS COULD BE ACCOMPLISHED BY SIMPLY CHANGING THE HONG KONG TRUSTEE TO AN OVERSEAS TRUSTEE.
+BEAR ING IN MIND THAT THE REVENUE IMPLICATIONS OF EXEMPTION FROM PROFITS TAX IN RESPECT OF UNIT TRUST INTEREST INCOME WOULD BE MINIMAL, AND THE USEFUL PART WHICH THE INDUSTRY PLAYS IN RELATION TO HONG KONG'S POSITION AS AN INTERNATIONAL FINANCIAL CENTRE. THE AD HOC GROUP HAS RECOMMENDED TO THE GOVERNMENT THAT THERE IS A CASE FOR SOME CONCESSION TO BE MADE, HE SAID.
THE HON PETER POON MOVED AN AMENDMENT TO THE EFFECT THAT THE INTEREST PAYMENT IN RELATION TO PUBLICLY LISTED DEBENTURES ISSUED BEFORE APRIL 1, 1984 WILL BE ALLOWED AS A TAX DEDUCTION.
+THIS IS ONLY FAIR AS SUCH DEBENTURES WERE ISSUED FOR COMMERCIAL PURPOSE AND WITHOUT KNOWLEDGE OF GOVERNMENT'S ATTENTION TO DISALLOW SUCH INTEREST, HE SAID.
ON THE BILL AS A WHOLE, HE AGREED WITH MR BROWN'S VIEW THAT +WE MUST WAIT AND SEE HOW THE NEW LAWS OPERATE AND LEARN FROM EXPERIENCE.+
CALLING FOR THE EARLY ISSUANCE OF THE PRACTICE NOTES, MR POON SAID +BUSINESSMEN SHOULD BE ABLE TO UNDERSTAND CLEARLY WHAT THE IR TAX LIABILITY WOULD BE IF THEY WERE TO ENGAGE IN PARTICULAR TRANSACTIONS.
+ IN THIS REGARD, IT IS MOST ESSENTIAL THAT PROPERLY DETAILED CLARIFICATIONS BE MADE IN THE PRACTICE NOTES TO BE ISSUED BY THE COMMISSIONER OF INLAND REVENUE ON THE NEW AMENDMENTS, + HE ADDED.
THE HON RITA FAN ABSTAINED FROM VOTING ON THE MOTION.
SHE EXPRESSED APPREHENSION THAT THE FINANCIAL BENEFITS GENERATED MIGHT WELL BE OFFSET BY THE COSTS OF IMPLEMENTING THE LEGISLATION AS WELL AS THE LIKELY UNFAVOURABLE ECONOMIC AND FINANCIAL RAMIFICATIONS.
OUTLINING HER RESERVATIONS, SHE SAID, +1 AM IN FAVOUR OF ANY ANTI-TAX-AVOIDANCE MEASURES TO PROTECT THE GOVERNMENT'S REVENUE AND AT THIS POINT IN TIME, WE ARE ALL PAINFULLY AWARE OF THE NEED TO GENERATE MORE REVENUE IN ORDER TO OFFSET OUR DEFICIT AS FAR AS POSSIBLE.
→HOWEVER 1 FOR ONE, WOULD PLACE PRIORITY ON THE MAINTENANCE OF HONG KONG AS A MAJOR FINANCIAL CENTRE, AND WOULD JEALOUSLY GUARD OUR SIMPLE AND COMPARATIVELY LOW TAX SYSTEM AS A MEANS TO ACHIEVE THE OBJECTIVE.+
/DESPITE THE