1
+
WEDNESDAY, APRIL 30, 1986
IT WAS WITH HESE CONCERNS IN MIND, HE ADDED, THAT THE
UMELCO AD HOC INLAND REVENUE REVIEW PANEL WAS FORMED IN JULY 1985 TO STUDY THE RECENT TAX LAW CHANGES.
HAVING CRITICALLY EXAMINED THE NUMEROUS REPRESENTATIONS RECEIVED FROM INTERESTED PARTIES AND HAVING CAREFULLY CONSIDERED THE EFFECTS THE 1984 AMENDMENT ORDINANCE MIGHT HAVE ON THE BUSINESS COMMUNITY, THE PANEL RECOMMENDED THE REPEAL OF THE PROVISIONS RELATING TO TAX ON +OFFSHORE+ INTEREST AND THIS WAS NOW ACCEPTED BY THE GOVERNMENT.
MR POON SAID HE HOPED THAT THE AMENDED VERSION OF PRACTICE NOTE NO. 13 CLARIFYING AND REFLECTING THE PRACTICE OF THE INLAND REVENUE DEPARTMENT WOULD BE ISSUED AS SOON AS POSSIBLE.
F
AS FOR THE LOSS IN REVENUE, MR POON SAID THE COST OF REPEALING THE RELEVANT LEGISLATION MIGHT NOT BE AS GREAT AS ESTIMATED.
+ IN FACT, IF SUCH PROVISIONS REMAIN IN FORCE, MOST BUSINESSES AFFECTED BY THEM WILL DEFINITELY CONSIDER SHIFTING THEIR FUNDS TO AVOID THE TAX ON +OFFSHORE INTEREST+ AND NEW COMPANIES WHICH MAY BE UNWITTINGLY CAUGHT BY SUCH LEGISLATION WILL BE INCLINED TO AVOID HONG KONG AS ITS BASE, HE SAID.
THE FINANCIAL SECRETARY, THE HON SIR JOHN BREMRIDGE, THEN THANKED MRS FAN AND MR POON FOR THEIR COMMENTS AND MEMBERS OF THE REVIEW PANEL FOR THE CONSTRUCTIVE REPORT WHICH THEY PRODUCED LAST YEAR,
HE SAID THAT ALTHOUGH HE PERSONALLY DID NOT BELIEVE THAT THE MEASURES ON OFFSHORE INTEREST IN THE 1984 AMENDMENT ORDINANCE BREACHED HONG KONG'S TERRITORIAL CONCEPT, BUT THERE WAS NO DOUBT. THAT DRAFTING DIFFICULTIES DID CREATE MISUNDERSTANDING AND UNCERTAINTY,
+HAPPILY OUR IMPROVED BUDGETARY SITUATION HAS ENABLED REPEAL TO TAKE PLACE AT LEAST A YEAR EARLIER THAN I HAD ANTICIPATED,+ HE SAID.
SIR JOHN SAID HE HOPED THAT MEMBERS WERE CORRECT IN THEIR BELIEF THAT THE REPEAL WOULD SERVE TO ENHANCE HONG KONG'S POSITION AS A FINANCIAL AND BUSINESS CENTRE.
15