WEDNESDAY, FEBRUARY 26, 1986
14
+REGULAR REVISIONS BEST GUARANTEE+
*****
REGULAR SMALL REVISIONS OF MAJOR CHARGES AND TAX RATES, TO MAINTAIN THEIR YIELD IN REAL TERMS, WAS THE BEST GUARANTEE OF A CONTINUING SOUND BASIS FOR THE GOVERNMENT'S FINANCES. THE FINANCIAL SECRETARY, SIR JOHN BREMRIDGE, SAID IN SUMMARISING THE REVENUE MEASURES IN THE 1986-87 BUDGET TODAY (WEDNESDAY).
SIR JOHN SAID IT HAD REQUIRED A RIGOROUS DISCIPLINE OVER THE LAST FEW YEARS TO REGAIN A SITUATION WHICH HAD BEEN GRADUALLY DE TER FORATING BECAUSE OF THE FALSE SENSE OF SECURITY ENGENDERED BY ABUNDANT LAND REVENUES.
THE PROCESS OF UPDATING MAJOR CHARGES AND TAX RATES HAD NOW LARGELY BEEN COMPLETED.
+A FIRM WATCH MUST BE KEPT ON THE RELATIONSHIP BETWEEN DIRECT AND INDIRECT TAXATION,
+I HAVE STATED IN PREVIOUS BUDGET SPEECHES MY VIEW THAT BY 1983 TOO MUCH EMPHASIS HAD COME TO BE PLACED ON DIRECT TAXATION AND NOT ENOUGH ON INDIRECT TAXATION. MY BUDGETS SINCE THEN HAVE SERVED TO REDUCE THE DIRECT: INDIRECT RELATIONSHIP FROM 69:31 IN 1982-83 TO 59:41 IN 1985-86. CONSOLIDATION SEEMS APPROPRIATE AT ABOUT THIS LEVEL,+ SIR JOHN SAID.
SIR JOHN SAID THE BUDGET PROPOSALS WOULD COST A NET $40 MILLION IN 1986-87-REVENUE RAISING MEASURES DESIGNED TO YIELD $295 MILLION, OFFSET BY TAX CONCESSIONS ESTIMATED TO COST $335 MILLION.
EXCLUSION FROM CHARGE TO STAMP DUTY SOUGHT ****
THE FINANCIAL SECRETARY, THE HON SIR JOHN BREMRIDGE, TODAY PROPOSED TO EXCLUDE FROM THE CHARGE TO STAMP DUTY HONG KONG BEARER INSTRUMENTS WHICH ARE IN RESPECT OF LOAN CAPITAL AND OF UNITS IN UNIT TRUSTS INVESTING ONLY IN SUCH INSTRUMENTS.
HE SAID THE STAMP DUTY CHARGE OF ONE PER CENT ON HONG KONG BEARER INSTRUMENTS RELATING TO LOAN CAPITAL HAD BROUGHT IN A NEGLIGIBLE AMOUNT OF REVENUE.
THIS WAS BECAUSE OVER THE PAST FEW YEARS MOST HONG KONG COMPANIES SEEKING LOAN CAPITAL HAD EITHER ISSUED NON-HONG KONG DOLLAR EURO BONDS OR USED OFFSHORE SUBSIDIARIES AS THE ISSUING VEHICLES, HE EXPEAINED.
/+CLEARLY, THIS