WEDNESDAY, FEBRUARY 25, 1987
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+THE CLAWBACK WILL OPERATE TO REDUCE THE ALLOWANCE BY 10 PER CENT OF THE AMOUNT BY WHICH A TAXPAYER'S INCOME EXCEEDS $34 000 IN THE CASE OF A SINGLE PERSON AND $70 000 FOR A MARRIED COUPLE.
+THUS, WHEN A SINGLE PERSON'S INCOME REACHES $84 000 AND A MARRIED COUPLE'S $170 000, THE ADDITIONAL PERSONAL ALLOWANCE WILL HAVE BEEN EXHAUSTED BY THE CLAWBACK.+
MR JACOBS SAID HE BELIEVED THAT COUNCILLORS, AND THE PUBLIC AT LARGE, WOULD WELCOME THE CONCESSIONS.
+THEY WILL ALSO SAVE THE INLAND REVENUE DEPARTMENT THE CONSIDERABLE TASK OF PROCESSING A LARGE NUMBER OF TAX RETURNS FOR A RELATIVELY LOW YIELD, AND WILL EXCLUDE FROM THE TAX NET SOME 100 000 PERSONS WHO WOULD OTHERWISE HAVE BECOME LIABLE TO SALARIES TAX NEXT YEAR,+ HE SAID.
IN PROPOSING THE CONCESSIONS. MR JACOBS WAS AWARE THAT THERE WAS SOME LACK OF CONSISTENCY WITH HIS DESIRE TO SEE TAXES MORE BROADLY BASED.
+ HAVE, HOWEVER, TAKEN INTO ACCOUNT THE PRESENT STRUCTURE OF DIRECT TAXES AND THE RELATIONSHIP BETWEEN DIRECT AND INDIRECT TAXES,+ HE SAID.
+
BELIEVE THAT, IN THE CONTEXT OF THE PRESENT TAX STRUCTURE, WHAT I AM PROPOSING IS BOTH EQUITABLE AND COST EFFECTIVE.
MR JACOBS PROPOSED TO INTRODUCE THE NEW CONCESSIONS FROM APRIL 1, 1987.
+THE FIRST OCCASION ON WHICH THEY WILL APPLY, THEREFORE, WILL BE TO PROVISIONAL AND FINAL SALARIES TAX ASSESSMENTS FOR THE FISCAL YEAR 1987-88, AND ALSO TO 1987-88 PERSONAL ASSESSMENTS.
+I ESTIMATE THAT THE COST TO THE REVENUE IN 1987-88 WILL BE ABOUT $470 MILLION, AND FOR A FULL YEAR, $650 MILLION.+
LINKED EXCHANGE RATE SYSTEM TO CONTINUE *****
THE GOVERNMENT HAS NO INTENTION OF TAMPERING WITH THE LINKED EXCHANGE RATE SYSTEM, THE FINANCIAL SECRETARY, THE HON PIERS JACOBS, SAID TODAY (WEDNESDAY).
PRESENTING HIS BUDGET SPEECH IN THE LEGISLATIVE COUNCIL
MR JACOBS SAID THE SYSTEM WAS A CRUCIAL ELEMENT UNDERLYING THE STABILITY OF THE MONETARY SYSTEM AND THE STABILITY AND PROSPERITY OF HONG KONG ITSELF.
/+THIS AND