XN000022-1976-02-25 — Page 2

WEDNESDAY, FEBRUARY 25, 1976

PROFITS TAX, PETROL DUTY TO GO UP

PART OF SIX BUDGÉT PROPOSALS TO RAISE REVENUE

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THE RATE OF CORPORATION PROFITS TAX IS TO BE RAISED FROM 16-1/2 PER CENT TO 17 PER CENT. AND DUTY ON PETROL AND AUTOMOTIVE DIESEL FUEL IS TO BE INCREASED BY AROUND 23 PER CENT AS PART OF THE FINANCIAL SECRETARY'S SIX REVENUE PROPOSALS PRESENTED TO THE LEGISLATIVE COUNCIL TODAY.

THE PROPOSALS, +DESIGNED SPECIFICALLY TO RAISE EXTRA REVENUE+ IN THE COMING FINANCIAL YEAR, INCLUDE AN INCREASE OF ONE

· PERCENTAGE POINT IN GENERAL RATES AND THE RAISING OF STAMP DUTY ON CONVEYANCES BY HALF A PERCENTAGE POINT TO 2-3/4 PER CENT,

THE FINANCIAL SECRETARY PROPOSED TO EXTEND THE AMBIT OF THE BUSINESS REGISTRATION ORDINANCE SO THAT FROM APRIL 1 THIS YEAR ALL COMPANIES INCORPORATED OR REGISTERED UNDER IT WILL BE OBLIGED TO PAY THE ANNUAL BUSINESS REGISTRATION FEE OF $150.

HE ALSO PROPOSED TO INCREASE ESTATE DUTY BY RAISING THE TOP RATE TO 18 PER CENT.

THE NEW RATES OF DUTY ON PETROL AND AUTOMOTIVE DISEL FUEL CAME INTO EFFECT FROM 4 O'CLOCK TODAY.

MR. HADDON-CAVE EXPRESSED CONFIDENCE THAT +NONE OF MY PROPOSALS WILL HAVE ANY DAMAGING EFFECT ON INVESTMENT DECISIONS OR INFLATE INDUSTRIAL COSTS OR HAVE MORE THAN A VERY SLIGHT EFFECT ON DISPOSABLE PERSONAL INCOMES, LET ALONE INVOLVE HARDSHIP FOR ANY PARTICULAR INCOME CLASS.+

HE SAID FOR VARIOUS REASONS, NOT THE LEAST REVENUE CONSIDERATIONS, HE HAD NO PROPOSALS FOR TAX CONCESSIONS OR REFORMS.

CORPORATION PROFITS TAX

REFERRING TO CORPORATION PROFITS TAX, MR. HADDON-CAVE SAID THE RATE FOR THE YEAR OF ASSESSMENT 1976-77 WOULD BE 17 PER CENT YIELDING $35 MILLION, BUT ONLY $28 MILLION WOULD ACTUALLY BE COLLECTED IN 1976-77.

THE SECOND INSTALMENT OF $7 MILLION WILL BE COLLECTED IN 1977-78,

+AT 17 PER CENT, THE FINANCIAL SECRETARY SAID, THIS WILL MEAN THAT THERE WILL BE A GAP OF TWO PERCENTAGE POINTS BETWEEN THE RATE OF CORPORATION PROFITS TAX AND THE STANDARD RATE OF TAX ON OTHER FORMS OF EARNINGS AND PROF ITS.+

/HE DESCRIBED