26 -
Finally, the Bill seeks to introduce a specific profits tax allowance to enable hotels to amortise refurbishment expenditure over a five-year period using an annual 20 per cent write-off. This recognises the fact that refurbishments have only a limited life in the case of hotels which have to be renovated from time to time to maintain quality and standards.
Mr President, with these remarks, I commend the Bill to Members.
End
Inland Revenue (Amendment) (No 2) Bill 1996
Following is a speech by the acting Secretary for the Treasury, Mr Alan Lai, in moving the second reading of the Inland Revenue (Amendment) (No 2) Bill 1996 in the Legislative Council today (Wednesday):
Mr President.
I move that the Inland Revenue (Amendment) (No. 2) Bill 1996 be read the second time.
The Bill seeks to apply a concessionary tax rate of 50 per cent of the normal profits tax rate to trading profits and interest income derived from certain debt instruments issued in Hong Kong. To qualify for the tax benefit, the debt instrument has to satisfy the following criteria -
First, it has to be lodged with and cleared by the Central Moneymarket Unit operated by the Hong Kong Monetary Authority (HKMA);
Secondly, it has a rating acceptable to the HKMA from a credit rating agency recognised by the HKMA;
Thirdly, it has an original maturity of not less than five years:
Fourthly, it has a minimum denomination of $500,000; and
Lastly, it is issued to the public of Hong Kong.