CO129-562-5 Hong Kong Government Service (Levy on Salaries) Ordinance 1937 8-1-1937 - 11-1-1937 — Page 7

Objects and Reasons.

1. The Hong Kong Government Service (Levy on Salaries) Ordinance, 1936, which imposed a percentage deduction and an exchange conversion deduction on sterling salaries exceeding £240 per annum and a percentage deduction on dollar salaries exceeding $240 per annum, was expressed by section 5 thereof to continue in force until the 31st December, 1936, and no longer, unless otherwise provided by Ordinance.

2. The financial prospects for 1937 appear brighter than those of 1936. The object of this Bill, therefore, is to repeal the 1936 Ordinance and to replace it by one which lightens the burden of sacrifice imposed on Government servants.

3. In the Bill the long title of the repealed Ordinance is extended so as to make express reference to both the percent- age levy and the exchange conversion rate of sterling salaries when paid in the Colony.

4. Except for the necessary substitution of 1937 for 1936 clauses 1 and 2 (1) of the Bill correspond with sections 1 and 2 (1) of the repealed Ordinance.

5. Clause 2 (2) of the Bill corresponds with section 2 (2) of the Ordinance except that sterling percentage deductions are reduced from 21%, 5%, 71%, 10% and 121% for the whole year to 2%, 4%, 6%, 8%, and 10% respectively for the first half of 1937.

6. Clause 2 (3), which is new, provides that the Legis- lature may by resolution continuc, reduce or abandon such sterling percentage deductions in respect of the months of July to December, inclusive, or any of them.

7. Clause 2 (4) relating to the calculation of Widows' and Orphans' Pension Contributions corresponds with section 2 (3) of the repealed Ordinance.

S. Clause 2 (5) relates to the exchange conversion rate of salaries paid in the Colony. Under section 2 (4) of the repealed Ordinance the exchange conversion rate for all such officers was fixed at 1/6 to the dollar for the first three months of 1936 and for subsequent months at such rates as the Legislative Council might direct. By a resolution of the Legislative Council on the 27th May sterling paid officers absent from the Colony on leave for a period exceeding three months or absent from the Colony on duty for any period were exempted from the sterling conversion rate and by resolutions of the 13th May, the 22nd July and the 24th November the conversion rates were fixed at 1/54, 1/4 and 1/3 respective- ly for the last three quarters of 1936. Clause 2 (5) of the Bill fixes the special conversion rate for the whole year at the prevailing monthly Treasury rate if such rate exceeds 1/3 to the dollar and at 1/3 to the dollar or sixteen dollars to the pound sterling if the Treasury rate, does not exceed 1/3 to the dollar. The effect of this will be that a conversion deduction will be made only when the Treasury rate for the dollar is below one shilling and three pence. The exemption of the salaries of officers on leave for a period exceeding three months and of officers absent on duty is dealt with in the proviso.

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