25
WEDNESDAY, MARCH 2, 1994
BEFORE COMING UP WITH THESE PROPOSALS, SIR HAMISH SAID HE ENTIRELY AGREED WITH THE VIEWS EXPRESSED BY LEGISLATIVE COUNCIL MEMBERS DURING HIS CONSULTATIONS WITH THEM THAT THE HIGHEST FOR CONCESSIONS SHOULD AGAIN BE SALARIES TAX.
PRIORITY
"THERE WAS ALSO A PREFERENCE FOR FOCUSING THESE CONCESSIONS MAINLY ON THOSE WHO PAY BELOW THE STANDARD RATE," HE NOTED.
HE ADDED: "THESE TAXPPAYERS INCLUDE THE TECHNICIANS, THE MANAGERS, THE JUNIOR EXECUTIVES, THE YOUNG PROFESSIONALS, WHOSE EXPERTISE IS SO ESSENTIAL TO OUR SERVICE-BASED ECONOMY. AND THE TEACHERS, THE SOCIAL WORKERS, THE NURSES AND OTHERS WHO SUSTAIN COMMUNITY'S WELL-BEING.
OUR
THE
"THEY ARE ALSO THE GROUP WHICH TENDS TO BENEFIT LEAST FROM PROTECTION OFFERED BY PUBLIC HOUSING AGAINST THE HIGH COST OF DOMESTIC ACCOMMODATION."
SIR HAMISH SAID HIS CONCERN TO RESPOND TO THE NEEDS OF THESE SALARIES TAXPAYERS LAST YEAR LED HIM TO INCREASE PERSONAL ALLOWANCES AND REVISE TAX BANDS. THOSE TAX MEASURES REDUCED THE AMOUNT OF TAX PAID BY OVER 90 PER CENT OF THOSE LIABLE TO SALARIES TAX.
HE ADDED THAT THOSE MAJOR CONCESSIONS SHOULD BE SEEN IN THE CONTEXT OF THE FOLLOWING OVERALL SALARIES TAX ENVIRONMENT:
ALMOST HALF THE WORKFORCE PAY NO DIRECT PERSONAL TAX OF KIND;
ANY
TAX
LOW BY
THE EFFECTIVE TAX RATE PAID BY THOSE LIABLE TO SALARIES AVERAGES ONLY 8 PER CENT, WHICH IS EXTRAORDINARILY INTERNATIONAL STANDARDS;
EARNED
* AND, UNLIKE MOST DEVELOPED ECONOMIES, ONLY SALARIES
IN THE TERRITORY ARE LIABLE TO TAX. HONG KONG HAS NO COMPREHENSIVE INCOME TAX, LET ALONE A LEVY ON TOTAL WORLDWIDE INCOMES AND EARNINGS.
CORPORATE TAX REDUCES TO 16.5 PER CENT
THE FINANCIAL SECRETARY, THE HON SIR HAMISH MACLEOD, TODAY (WEDNESDAY) PROPOSED TO REDUCE THE CORPORATE PROFITS TAX RATE FROM THE PRESENT LEVEL OF 17.5 PER CENT TO 16.5 PER CENT IN VIEW OF HONG KONG'S HEALTHY FINANCIAL POSITION.
MOVING THE SECOND READING OF THE APPROPRIATION BILL, SIR HAMISH SAID IN THE LEGISLATIVE COUNCIL THIS WOULD COST $1.6 BILLION·IN 1994/95 AND OVER $10 BILLION UP TO 1997/98.
HE SAID THE PROPOSED CONCESSION WOULD ENHANCE HONG KONG'S COMPETITIVENESS AS A REGIONAL BUSINESS CENTRE.
"BUT THIS IS NOT MY ONLY REASON. THE PRINCIPLE SHOULD BE THAT THE GOVERNMENT ONLY RAISES IN TAXATION WHAT IT NEEDS TO FINANCE ITS AGREED POLICIES AND PROGRAMMES, SIR HAMISH SAID.
+4
/26