XN000022-1974-04-10 — Page 19

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WEDNESDAY, APRIL 10, 1974

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NEW DEPRECIATION RATES FOR PLANT AND MACHINERY APPROVED

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THE LEGISLATIVE COUNCIL TODAY APPROVED A REVISED TABLE OF RATES OF ANNUAL DEPRECIATION IN RESPECT OF PLANT AND MACHINERY UNDER THE INLAND REVENUE RULES.

THE NEW RATES, EFFECTIVE FROM THE YEAR OF ASSESSMENT COMMENCING ON OR AFTER APRIL 1, 1974, WERE AMENDED BY THE BOARD OF INLAND REVENUE LAST MONTH FOLLOWING A PROPOSAL BY THE FINANCIAL SECRETARY IN HIS BUDGET SPEECH.

THE HON. PHILIP HADDON-CAVE TOLD THE COUNCIL THAT IN CONSTRUCTING THE NEW TABLE, THE BOARD BORE TUO OBJECTIVES IN MIND.

+FIRST, TO PROVIDE A MEASURE OF RELIEF FOR HOST PROFITS TAX PAYERS BY INCREASING THE BASIC RATE FOR PLANT AND MACHINERY (WITH CERTAIN EXCEPTIONS) FROM 10 PER CENT TO 15 PER CENT UN THEIR REDUCING VALUES AND SECONDLY, TO HAKE FOR SIMPLER ADMINISTRATION BY KEEPING THE NUMBER OF EXCEPTIONS TO THE BASIC RATE WHERE THE 15 PER CENT HOULD BE EITHER TOO GENEROUS OR INSUFFICIENT TU A MINIMUM.+

HE SAID EXAMPLES OF EXCEPTIONS INVOLVING RATES HIGHER THAN 15 PER CENT INCLUDED BLEACHING AND FINISHING MACHINERY AND PLANT C20 PER CENT), ELECTRONICS HANUFACTURING MACHINERY AND PLANT C20 PER CENT), MOTOR VEHICLES C25 PER CENT), PLASTIC MANUFACTURING MACHINERY AND PLANT (20 PER CENT), SULPHURIC AND NITRIC ACID PLANT (25 PER CENT) AND TEXTILE AND MANUFACTURING MACHINERY AND PLANT (20 PER CENT).

EXAMPLES OF EXCEPTIONS. INVOLVING RATES LOWER THAN 15 PER CENT INCLUDED SHIPS (10 PER CENT) AND MACHINERY FOR THE PLANT-INTENSIVE PUBLIC UTILITIES (10 PER CENT).

EXPLAINING WHY THE PUBLIC UTILITIES HAVE BEEN EXCLUDED FROM ENJOYING THE BASIC RATE OF 15 PER CENT, HE SAID: +FIRST, THE COST TO THE REVENUE WOULD BE CONSIDERABLE= SECONDLY, THE RELIEF IS INTENDED PRIMARILY FOR THE MANUFACTURING SECTOR- AND THIRDLY, THERE IS NO EVIDENCE THAT THE PUBLIC UTILITIES NEED ADDITIONAL RELIEF BEYOND THAT RESULTING FROM THE INCREASE IN THE RATE OF INITIAL ALLOWANCE I ALSO PROPOSED IN MY BUDGET SPEECH.+

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