*
WEDNESDAY, AUGUST 16, 1978
THAT THE POSITION OF A FINANCIAL INSTITUTION SUCH AS A BANK IS NOT ANALOGOUS TO THAT OF AN INDIVIDUAL OR A MANUFACTURER. THE SHAREHOLDERS' FUNDS IS AN ESSENTIAL INGREDIENT IN CREATING A BANK'S PROFITS AND IS FUNDAMENTAL TO THE BUSINESS OF BANK ING WITHOUT WHICH A BANK WOULD BE UNABLE TO ATTRACT DEPOSITS.
ON THE PRACTICAL SIDE, THE FINANCIAL SECRETARY SAID THE COMMISSIONER FOR INLAND REVENUE FORESEES CONSIDERABLE DIFFICULTY IN OBTAINING DETAILS OF +SHAREHOLDERS' FUNDS+, AND ENDLESS ARGUMENTS AS TO WHICH ASSETS REPRESENT +SHAREHOLDERS' FUNDS+ STATUTORY, AND OF NECESSITY, ARBITRARY DEFINITION OR FORMULA WERE
UNLESS A WRITTEN INTO THE ORDINANCE.
MOREOVER, MR. HADDON-CAVE SAID THERE IS LIKELY TO BE CONSIDERABLE DIFFICULTY IN PERSUADING NON-RESIDENT HONG KONG BANKS TO FURNISH THE IR WORLD-WIDE ACCOUNTS, INCLUDING DETAILS OF HIDDEN RESERVES, TO ENABLE THE COMMISSIONER TO CALCULATE RELEVANT FIGURES OF SHAREHOLDERS' FUNDS.
HE ADDED THAT IT WOULD NOT BE REASONABLE ON OTHER GROUNDS TO CALL FOR SUCH ACCOUNTS.
SPEAKING EARLIER AT THE RESUMED DEBATE ON THE BILL, THE HON. ALEX WU EXPRESSED DOUBT ON THE ASSERTION THAT THE GOVERNMENT'S REFUSAL TO EXEMPT FROM THE TAX CHARGE NET SHAREHOLDERS' FUNDS WHICH ARE EMPLOYED TO EARN INTEREST ABROAD WILL NOT FRIGHTEN AWAY FROM HONG KONG ANY FINANCIAL BUSINESS WORTH HAVING.
MR. WU ADDED THAT CONSIDERATION SHOULD BE GIVEN TO THOSE INSTITUTIONS WHICH ARE NOT YET DOING BUSINESS HERE.
HE PROPOSED THAT MAYBE WE SHOULD CONSIDER A LOWER RATE OF TAX UNDER THE BILL.
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