CO129-553-10 Urban Council- re-organisation of the medical and sanitary services 8-3-1935 - 31-7-1935 — Page 25

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HONG KONG LEGISLATIVE COUNCIL.

3. If the volume of the business referred to in Question 2 is ascertainable, will the Honourable Member inform the Council what would have been the estimated amount of stamp fees derivable therefrom if the transactions had been liable to payment of stamp fees on the scale chargeable to shares of Hong Kong Companies?

4. Is it the opinion of Government that the operations by brokers in Hong Kong on exchanges outside the Colony do divert dealings in shares of local Companies; and if they do, does not the revenue of the Colony suffer by reason of the diversion from local to foreign exchanges through a diminution in stamp duty collections in respect of share contracts and/or debit notes?

5. For the benefit of the revenue of the Colony has the attention of Government been directed to the necessity for rectifying an existing anomaly that while dealings in shares of local Joint Stock Companies are subject to stamp fees certain foreign Companies enjoy immunity from such taxation?

THE COLONIAL TREASURER replied:-

1. The answer is in the affirmative.

2. The answer is in the negative.

3. In view of the answer to question 2, this question does not arise.

4. Government is not in a position to say to what extent, if any, operations by brokers in Hong Kong on exchanges outside the Colony divert dealings in shares of local companies. Share dealings and investments are governed by the demand or requirements of each particular buyer or investor. A man with money to invest may choose as he pleases and buy local or other investments as his fancy dictates. The revenue of the Colony, however, does not suffer as all contract notes issued by brokers in Hong Kong must be stamped.

5. If the Honourable Member means immunity from stamp duty on contract notes, there is no anomaly as such attract duty whether the company is registered locally or abroad. Transfer fees on shares of companies registered abroad are naturally not charged on transactions in Hong Kong.

It is assumed that in the Honourable Member's questions the expression "debit note" is used in its local sense, the term "debit note" being used locally for cash transactions whilst the term "contract note" is used for other than cash trans- actions. Legally the two terms have the same meaning.

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