XN000022-1978-07-05 — Page 26

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WEDNESDAY, JULY 5, 1975

INLAND REVENUE (AMENDMENT) (NO. 3) BILL

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A PILL WAS INTRODUCED INTO THE LEGISLATIVE COUNCIL TODAY TO END THE EXISTING LEGISLATION BY EMPOWERING THE FINANCIAL SECRETARY TO SPECIFY TAX EXEMPTION RATES OF INTEREST PAYABLE BY THE GOVERNMENT, LICENSED BANKS AND CERTAIN SPECIFIED PUBLIC UTILITIES, SUBJECT TO AN UPPER LIMIT OF FIVE PER CENT PER YEAR.

MOVING THE SECOND READING OF THE INLAND REVENUE (AMENDMENT) (NO. 3) BILL 1978, THE ACTING FINANCIAL SECRETARY, THE HON. DAVID JORDAN, SAID THE AMENDING LEGISLATION, IF ENACTED, WOULD MEAN THAT CHANGES COULD BE MADE AT SHORT NOTICE TO COINCIDE PRECISELY WITH THE EFFECTIVE DATE FOR A CHANGE IN THE RATE PAYABLE BY BANKS ON SAVINGS DEPOSITS.

+THE BILL IS DESIGNED MEPELY TO ENABLE THE FINANCIAL SECRETARY TO GIVE EFFECT MORE QUICKLY TO ESTABLISHED POLICY, + MR. JORDAN SAID.

+THERE IS NO INTENTION TO CHANGE THE POLICY NOR AT PRESENT TO ALTER THE EXEMPTION RATE APPLICABLE TO INTEREST PAID BY THE PUBLIC UTILITIES LISTED IN THE THIRD SCHEDULE TO THE ORDINANCE,+ HE ADDED.

EXPLAINING THE PRESENT SITUATION, MR. JORDAN SAID THE INLAND REVENUE ORDINANCE PROVIDES FOR EXEMPTION FROM TAX OF INTEREST PAYABLE BY THE GOVERNMENT, LICENSED BANKS, AND CERTAIN SPECIFIED PUBLIC UTILITIES, PROVIDED THAT THE RATES OF INTEREST DO NOT EXCEED

ERTAIN PERCENTAGES.

+AS REGARDS INTEREST PAYABLE BY LICENSED BANKS, THIS PERCENTAGE RATE HAS FOR MANY YEARS BEEN VARIED TO ACCORD WITH THE RATE PAID BY BANKS ON SAVINGS ACCOUNTS,+ MR. JORDAN SAID.

MR. JORDAN ADDED THAT IN 1975, THE LAW WAS AMENDED TO GIVE POWERS TO THE GOVERNOR IN COUNCIL TO ALTER THE EXEMPTION RATE THUS AVOIDING SOME OF THE TIMING PROBLEMS INVOLVED IN ENSURING THAT THE EXT: PTION RATE. REMAINED THE SAME AS THE SAVINGS ACCOUNTS RATE.

+THE LAST CHANGE IN THE EXEMPTION RATE ON APRIL 27, WHICH WAS INCIDENTALLY THE FIRST ADJUSTMENT SINCE 1975, WAS ERCOUGHT INTO EFFECT BY A REVENUE PROTECTION ORDER,+ MR. JORDAN SAID.

+THIS WAS A RATHER CUMBERSOME PROCEDURE, BUT WAS THE ONLY ONE AVAILABLE THAT WOULD ENABLE US TO SYNCHRONISE THE TIMING,+ HE ADDED.

DEBATE ON THE BILL WAS ADJOURNED.

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