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WEDNESDAY, APRIL 30, 1986
REPEAL OF TAX ON OFFSHORE INTEREST WELCOMED
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GOVERNMENT'S MOVE TO REPEAL THE TAXATION OF OFFSHORE INTEREST UNDER PROFITS TAX WAS LAUDED BY UNOFFICIAL MEMBERS IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).
SPEAKING AT THE RESUMED DEBATE ON THE INLAND REVENUE (AMENDMENT) (NO. 2) BILL PROPOSING THE REPEAL, BOTH THE HON RITA FAN AND THE HON PETER POON SAID THAT SUCH A MOVE WOULD BE WELCOMED BY THE BUSINESS COMMUNITY, THE LEGAL AND ACCOUNTANCY PROFESSIONS.
MR POON SAID HE WAS PLEASED TO SEE THAT GOVERNMENT HAD RESPONDED POSITIVELY TO CONSTRUCTIVE AND HELPFUL SUGGESTIONS SUPPORTED BY FAIR AND REASONED ARGUMENTS.
+ THE AMENDMENT BILL BEFORE US IS A DEMONSTRATION OF ITS AVOWED INTENTION TO KEEP OUR TAX LEGISLATION AS SIMPLE AND EFFECTIVE AS POSSIBLE, + HE ADDED.
SHARING THE SAME VIEW, MRS FAN SAID THE ACTION MIGHT REMOVE UNCERTAINTY AND SUSPICION IN THE MINDS OF MANY BUSINESSMEN WHO WERE NOW MORE CONFIDENT AND REASSURED THAT HONG KONG SHOULD ALWAYS ABIDE BY THE TERRITORIAL CONCEPT BOTH IN LETTER AND IN SPIRIT.
+IT ALSO SHOWS THE BUSINESS COMMUNITY THAT THE GOVERNMENT HAS THE INTENTION TO KEEP THE TAX LEGISLATION SIMPLE AND CLEAR.
+SUCH EVIDENCE WILL ENHANCE HONG KONG'S REPUTATION AS AN INTERNATIONAL FINANCIAL AND BUSINESS CENTRE, WHICH IS LIKELY TO BE MORE BENEFICIAL IN THE LONGER TERM TO THE COMMUNITY AS A WHOLE AND POSSIBLY THE REVENUE, SHE SAID.
BOTH MEMBERS CONCEDED THAT IT WAS UNDERSTANDABLE WHY THE GOVERNMENT INTRODUCED THE TAX ON INTEREST EARNED OVERSEAS IN 1984 BUT NOTED IT HAD CREATED SERIOUS CONCERN THAT HONG KONG'S +TERRITORIAL SOURCE+ TAX CONCEPT WAS BEING BREACHED.
MEANWHILE, THE INLAND REVENUE DEPARTMENTAL INTERPRETATION AND PRACTICE NOTE NO. 13 ISSUED IN SEPTEMBER 1984 HAD IN FACT FURTHER INCREASED SUCH CONCERN, ESPECIALLY BY ITS REFERENCE TO THE +MIND AND MANAGEMENT+ CONCEPT WHICH WAS MORE RELEVANT TO THE +RESIDENCE+ BASIS OF TAXATION THAN TO OUR TERRITORIAL SOURCE+ BASIS OF TAXATION, MR POON SAID.
/IT WAS