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are contained in Clauses 4 and 6 of the Bill, is that a married man without children, for example, will at the new rate pay exactly the same as he paid at the old rate unless his salary exceeds $1,000 a week. Indeed, in many cases he may pay less, thanks to the concession in regard to quarters supplied by the employer. I should add that for some time past the Commis- sioner of Inland Revenue has been pressing for a number of amendments to the Inland Revenue Ordinance, mainly in the interests of the smoother running of his department, and indeed I understand that some of these amendments have been suggest- ed by local professional associations. However desirable some of these amendments may be, Government has decided that they must be considered separately from the question of an increase in the rate of tax, so that neither issue can be clouded by the other. The Commissioner has therefore been authorized to proceed with the drafting of a further amending bill after this present one has been disposed of, and his proposals will in due course be submitted for the consideration of Honourable Mem- bers after scrutiny by Government.
I feel that I must emphasize that although the enactment of this Bill and of the forthcoming Business Registration Bill would give us a paper surplus of $3 millions, the position is not such as to give cause for any complacency. Already it appears that in the near future we may have to meet heavy bills for further security measures, and the possible effect on our finances of the discussions now proceeding in London must be borne in mind. The Estimates do not provide for these con- tingencies.
THE COLONIAL SECRETARY seconded, and the Bill was read a First time.
OBJECTS AND REASONS.
The "Objects and Reasons" for the Bill were stated as follows:
It is anticipated that unless an increase in taxation is authorized a deficit will result in regard to revenue and expen- diture for the Colony for the financial year 1950-51. This Bill is primarily designed so to amend the Inland Revenue Ordin- ance, 1947 (the principal Ordinance) as to permit of an increase in the standard rate of tax.
2. In the Bill-
Clause 2 provides for the repeal and replacement of section 5 of the principal Ordinance to alter the standard rate from 10%, as now existing, to 124%.
Clause 3 provides for the repeal and replacement of section 10(2) of the principal Ordinance. Such provision, which governs the valuation for purposes of tax of places of residence provided by an employer, has proved cumbersome and in- equitable in practice. The opportunity is therefore taken to
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provide by the amendment proposed for a simpler method which allows of the application of 71% of the other income and per- quisites derived from an employer in ascertaining the rental value of a place of residence for the purposes of tax. The proposed amendment makes provision whereby inequity to a tax payer may be avoided-
(a) by allowing a lower rate than 71% of other income and perquisites derived from an employer where place of re- sidence consists of restricted accommodation in a hotel, hostel or boarding house; and
(b) in other cases by allowing a person to elect to have rateable value substituted for such rental value at 71%.
Clause 4. This clause provides for the repeal and replace- ment of section 14 of the principal Ordinance so that addition to the burden of the majority of salary earners as a result of the proposed increase in the standard rate will be avoided. This position will result from the fact that it is proposed by the amendment to introduce graduations of one-fifth of the standard rate instead of quarters of the standard rate as at present specified in the section. The effect would be to charge no increase in tax on the first $40,000 of taxable income of employees.
Clause 5. A consequential amendment to section 30, stipulat- ing deduction of tax at the new rate from payments or credits of interest on mortgages, etc., is provided by this amendment, and a proviso to the clause restricts such new provisions to payments or credits made after the Bill becomes law.
Clause 6. This clause provides for the repeal and replace- ment of section 44(1) of the principal Ordinance so as to apply the same graduation of rates to Personal Assessment as the amendment proposed by clause 4 applies to Salaries and An- nuities Tax.
Clause 7. This clause provides that the legislation proposed shall have effect from the 1st April, 1950, i.e. the commencement of the financial year, but provides for the continuation of the previous method of assessment for assessments and recovery of tax still to be made for past years.
LAW REVISION (MISCELLANEOUS AMENDMENTS)
BILL, 1950.
THE ATTORNEY GENERAL moved the Second reading of a Bill intituled "An Ordinance to make amendments to mis- cellaneous Ordinances for the purpose of facilitating the pre- paration of the revised edition of the laws".
THE COLONIAL SECRETARY seconded, and the Bill was read a Second time.
Council then went into Committee to consider the Bill clause by clause.
No comments yet.
Private notes are available after approval.