XN000022-1975-02-26 — Page 21

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WEDNESDAY, FEBRUARY 26, 1975

PROPOSALS TO RAISE EXTRA REVENUE OUTLINED FOR 1976-79 FORECAST PERIOD

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THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE, TODAY OUTLINED SEVERAL PROPOSALS FOR RAISING EXTRA REVENUE TO FINANCE WHAT HE DESCRIBED AS +ACCEPTABLE RATE OF EXPENDITURE÷ FOR THE THREE-YEAR FORECAST PERIOD OF 1976-79.

THESE MEASURES INCLUDED THE APPOINTMENT OF AN INLAND REVENUE ORDINANCE REVIEW COMMITTER, THE INTRODUCTION OF DIVIDENDS WITHHOLDING TAX AND REVALUATION OF PROPERTIES IN RELATION TO RATING.

IN HIS BUDGET SPEECH TO THE LEGISLATIVE COUNCIL, HE NOTED THAT THE PRESENT TAX SYSTEM WAS, UNLIKELY TO DE SUFFICIENTLY PRODUCTIVE EVEN FOR A CAREFULLY CONTROLLED EXPANSION OF THE GOVERNMENT'S SERVICES AND IMPLEMENTATION OF CAPITAL WORKS PROGRAMMES.

+AND AS THERE MUST BE A LIMIT ON DORROWINGS, 1 MUST NOW INDICATE THE WAYS IN WHICH I THINK THE EXTRA FISCAL REVENUE REQUIRED MUST BE FOUND, BUT WITHOUT BEING TOO SPECIFIC AS TO TIMING AND NUMBERS.+

ON THE PROPOSED APPOINTMENT OF THE REVIEW COMMITTEE, MR. HADDON-CAVE POINTED OUT, THAT IN HIS BUDGET SPEECHES IN 1973 AND 1974, HE HAD SAID THAT HE HOPED TO INTRODUCE A BILL TO AMEND THE INLAND REVENUE ORDINANCE TO RESTORE THE AMBIT OF THE PROFITS TAX CHANGE IN RESPECT OF DUSINESSES GENERALLY AND TO WIDEN THE DEFINITION OF CHARTER HIRE SO AS TO MAKE A LARGER PROPORTION OF RESIDENT SHIPOWNERS' PROFITS CHARGEADLE TO HONG KONG PROFITS TAX.

A BILL WAS INDEED DRAFTED LAST YEAR BUT IT HAD BEEN DECIDED NOT TO PROCEED WITH THE BILL, AND FOR THE TIME BEING THERE THE MATTER MUST REST.

HE PROPOSED THAT THE NEXT STEP SHOULD BE THE APPOINTMENT OF A COMMITTEE TO REVIEW THE ORDINANCE. >THE TERMS OF REFERENCE WILL BE SO DRAFTED AS TO MAKE IT CLEAR THAT THE COMMITTEE WILL DE CONCERNED WITH BASIC PRINCIPLES RATHER THAN ADMINISTRATIVE DETAILS,✨

THE FINANCIAL SECRETARY HOPED THAT THE APPOINTMENT, MEMDERSHIP AND TERMS OF REFERENCE OF THE COMMITTEE COULD DE ANNOUNCED AROUND THE MIDDLE OF 1976. THE PUBLIC WILL, OF COURSE, DE GIVEN AMPLE OPPORTUNITY TO MAKE THEIR VIEWS KNOWN TO THE COMMITTEE.>

ON DIVIDENDS WITHHOLDING TAX, HE SAID PENDING THE REPORT_OF THE PROPOSED INLAND REVENUE ORÐINÄNGE REVIEW COMMITTEE AND THE INTRODUCTION OF THE LEGISLATION NECESSARY TO GIVE EFFECT TO WHATEVER RECOMMENDATIONS THEY MIGHT MAKE, THIS TAX HOULD BE ONE MEASURE WHICH COULD BE INTRODUCED FOR THE YEAR OF ASSESSMENT 1976-77.

/TIUS TAX,