WEDNESDAY, MAY 9, 1990
'IT
27
IS OF GREAT IMPORTANCE IN OUR LOW TAX ECONOMY THAT WE DO ALL WE CAN TO OBSERVE THE PRINCIPLE THAT SERVICES SHOULD NOT IN GENERAL BE SURSIDISED
AND TO ENSURE THAT THOSE SERVICES WHICH ARE NOT A FAIR CHARGE ON THE GENERAL TAXPAYER ARE PAID FOR BY THOSE WHO BENEFIT FROM THEM.
ON
SOME MEMBERS' SUGGESTION THAT HONG KONG'S WOULD
FROM REVIEW BY A COMMITTEE, SIR PIERS BENEFIT FIRST SAY THAT OUR TAX SYSTEM IS ALIVE AND WELL.
TAXATION SYSTEM
"LET SAID:
ME
"BY
COMPARISON WITH SYSTEMS IN MANY OTHER DEVELOPED ECONOMIES THE HONG KONG TAX SYSTEM IS A MODEL OF SIMPLICITY AND STABILITY.
"ITS RATES ARE
THE VERY LOW. IT IS ALSO TAILORED
MUCH ΤΟ SPECIAL NEEDS OF HONG KONG IN THAT IT IS NON-TARIFF BASED; IT AND BY ENCOURAGES INVESTMENT BOTH BY FOREIGN INVESTORS IN HONG KONG
ΤΟ ENJOY HONG KONG PEOPLE IN LOCAL ENTERPRISE; AND IT ALLOWS PEOPLE THE REWARDS OF ENTERPRISE AND HARD WORK,
SIR PIERS SAID NO SYSTEM WAS PERFECT AND AS FAR THE GOVERNMENT RESPONDED TO JUSTIFIED CRITICISMS.
"FOR
EXAMPLE,
AS POSSIBLE,
TO
CHANGES IN THAT SPIRIT, WE HAVE INTRODUCED DEAL WITH THE DOUBLE TAXATION PROBLEM VIS-A-VIS HONG KONG PEOPLE WORKING
CHINA IN
ON
WITH A TEMPORARY BASIS; WE
AWAY HAVE DONE WITHHOLDING TAX ON INTEREST; AND WE ARE IN THE PROCESS OF FINALISING ARRANGEMENTS FOR PROFITS TAX EXEMPTION FOR MUTUAL FUND CORPORATIONS IN THE SAME WAY AS IS ALREADY AVAILABLE FOR UNIT TRUSTS," HE SAID.
SIR
VIEWED IN STRESSED THAT A TAX SYSTEM COULD NOT BE PIERS
ISOLATION.
MEMBERS HE REMINDED SPLENDID DOMESTIC
THAT SOUTH-EAST JOCKEYING FOR ASIAN ECONOMIES WERE NOW ON A FAST TRACK AND THAT THE POSITION WAS BECOMING INTENSE.
"FAVOURABLE TAX REGIMES FORM AN IMPORTANT PART OF THE PULL OUR COMPETITORS, ALTHOUGH IT IS STILL DIFFICULT TO BEAT HONG KONG THE LOW TAXATION STAKES.
THAT
A
OF
IN
"IN
COMMITTEE THE SAME VEIN, I AM NOT YET PERSUADED BROUGHT IN TO TRAIN AND MANAGE OUR ENTRY IN THIS PARTICULAR RACE WOULD WIN US FIRST PLACE, HE SAID.
SIR PIERS ALSO NOTED THAT HE WOULD SEEK THE ASSISTANCE OF JOINT LIAISON COMMITTEE ON TAXATION IN TAKING A BROADER VIEW OVERALL TAXATION PHILOSOPHY.
THE
OF OUR
"WE SHOULD WORK CLOSELY TOGETHER TO IDENTIFY PROBLEMS AND SOLUTIONS," HE SAID.
FIND
ON THE PROPOSED INCREASES IN RATES, SIR PIERS SAID RATES AN IMPORTANT SOURCE OF REVENUE, BROAD-BASED AND STABLE.
WERE
[
"BUT THEY ARE RELATED TO THE RENTAL VALUE OF PROPERTY, AND
PROPERTIES 15
TASK WHICH REVALUATION OF
CAN ONLY A MAMMOTH COMPLETED PERIODICALLY. IN BETWEEN REVALUATIONS, THE YIELD FROM DIMINISHES IN REAL TERMS, HE SAID.
THE
BE RATES
/SIR PIERS