XN000022-1978-03-01 — Page 13

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WEDNESDAY, MARCH 1, 1978

+ SUSPECT THAT, AT OUR STAGE OF DEVELOPMENT, WE MAY FIND THAT THE SCOPE IN RESPECT OF TEXTILES AND CLOTHING IS LIMITED,+ HE SAID. +SUPPOSING, AS MAY WELL BE THE CASE, THE GROWTH RATE OF EXPORTS OF TEXTILES AND CLOTHING IN REAL TERMS IS HALVED. THEN. TO MAINTAIN OUR DESIRED GROWTH RATE OF G.D.P.. EXPORTS OF OTHER PRODUCTS MIGHT HAVE TO INCREASE BY SOMETHING OVER 12

PER CENT PER ANNUM (COMPARED WITH A RECENT TREND OF EIGHT PER CENT).+

MR. HADDON-CAVE SAID A SHIFT TO SUCH PRODUCTS WOULD INVOLVE GREATER UNCERTAINTY,

+FOR EXAMPLE, OUR EXPERIENCE WITH ELECTRONICS INDICATES WE SHALL TEND TO DEPEND ON SUDDEN DEVELOPMENTS IN TECHNOLOGY. THEN AGAIN, MANY OF THESE PRODUCTS ARE FAR MORE DURABLE THAN THE PRODUCTS OF THE TEXTILES AND CLOTHING INDUSTRIES AND THE MARKETS FOR THEM ARE MORE EASILY SATURATED,+ HE SAID.

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+FURTHERMORE, IN ANY CASE, HONG KONG LACKS THE ADVANTAGE OF A LEAD IN TERMS OF EXPERIENCE, ONE OF THE MANY POINTS WHICH THE ADVISORY COMMITTEE ON DIVERSIFICATION WILL BE DEALING WITH, HE ADDED.

RECOMMENDATIONS OF THIRD INLAND REVENUE ORDINANCE COMMITTEE ******

THE RECOMMENDATIONS EY THE THIRD INLAND REVENUE ORDINANCE REVIEW COMMITTEE ON TAXATION TREATMENT OF INTEREST, DIVIDEND WITHHOLDING TAX AND THE EXISTING SURCHARGE OF TWO PERCENTAGE POINTS ON CORPORATE PROFITS TAX TOGETHER WITH SEVERAL RELATIVELY MINOR RECOMMENDATIONS HAVE BEEN ACCEPTED BY THE GOVERNMENT.

THIS WAS REVEALED TODAY BY THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE IN HIS BUDGET SPEECH IN THE LEGISLATIVE COUNCIL.

MR. HADDON-CAVE SAID A SMALL PARTY OF OFFICIALS CHAIRED EY HIM TO EXAMINE THE RECOMMENDATIONS OF THE COMMITTEE HAD FOUND EIGHT OTHER RECOMMENDATIONS TO BE UNACCEPTALLE.

+THESE DEAL WITH A WORKING LIFE'S ALLOWANCE, THE EXTENSICI. OF PROFITS TAX TO PROFITS WHICH A BUSINESS ACTIVELY CARRIED ON IN HONG KONG OBTAINS WITHOUT THE SUBSTANTIAL INTERVENTION OF ANY BRANCH ELSEWHERE, THE TAXATION. TREATMENT OF CERTAIN FRINGE BENEFITS, THE TAXATION TREATMENT OF QUARTERS OCCUPIED BY DIRECTORS OF DIRECTOR-CONTROLLED COMPANIES, SUBSCRIPTIONS TO PROFESSIONAL SOCIETIES, PREMIUMS FOR SHORT LEASES AND GIFTS

IN KIND TO CHARITIES.+

MR. HADDON-CAVE