XN000022-1973-03-28 — Page 36

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Wednesday, March 28, 1973

He felt that this "sacrifice" to the revenue could be made to bring

the system back to the basic philosphy for a low tax structured economy.

"Certainly having done this, I hope to avoid the turbulent waters of

personal tax reform for some years to come, " he said.

At the same time, the Financial Secretary rejected suggestions by

Unofficial Members that tax relief for life insurance and for dependent parents

should be retained.

He said he had proposed to abolish the dependent parent allowance

"because of its abuse and its inequity due to territorial limitation.'

tt

Difficulties

Aside from the difficulties involved in administering this allowance,

he said, there had been deliberate attempts to mislead the Inland Revenue

Department, including cases where claims had been made for deceased parents.

A stage had been reached, he went on, where it was impossible to

judge the genuine claim from the false and he thought it better to reincorporate

this allowance into a wider one for everybody.

Of the proposed abolition of life insurance relief, the Financial

Secretary said "its subsidy effect makes it inappropriate in terms of the

philosphy of the Hong Kong tax system."

He said he had advocated its abolition in the context of a major

reform of the personal tax system.

"I consider this to be the correct moment to do this exercise because,

with revenue bouyant, I can take a sympathetic approach to the question of

basic allowances."

/Mr. Haddon-Cave