XN000022-1976-04-07 — Page 29

Wednesday, April 7, 1976

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He pointed out that the Government had already sought to collect the

maximum possible revenue from fees and charges, 30 per cent of total recurrent

revenue.

He noted that while there were limits to the range of indirect taxes

here, yet 46 per cent of all tax revenue came from indirect taxes which was

not all that 'minimal', as described by Dr. the Hon. S.Y. Chung.

Referring to the appointment of the third Inland Revenue Ordinance

Review Committee, the Financial Secretary said the Committee would consider,

in particular, whether Hong Kong should persist with separate levies on salaries,

profits, interest earnings and property income and with the limited territorial

charge.

He believed that there was scope for increasing the productivity of

the direct tax system, thus obviating the possible necessity of adopting the

easy but not necessarily the wise or fair option of simply lifting the

邺

standard rate from the present 15 per cent.

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"This is important for there can be no doubt that our direct tax system

must be low. Manufacturers and exporters must be able to earn a rate of return

after tax which stimulates a maximum rate of capital investment irrespective,

incidentally, of its source, to ensure the highest possible growth rate of the

economy and henee of living standards," he said.

Mr. Haddon-Cave stressed that the Committee was not specifically asked,

as Dr. Chung auggested, to examine the equity and fairness of the system,

"although I would expect that it will give full consideration to the removal

of such inequities as do exist in the present system where this is consistent

with its terms of reference."

/He continued