XN000022-1978-11-10 — Page 2

FRIDAY, NOVEMBER 10, 1978

TAX ALLOWANCE FOR DEPENDENT PARENTS TO BE RE-INTRODUCED

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A BILL PROPOSING AMENDMENTS TO THE INLAND REVENUE ORDINANCE TO ALLOW THE RE-INTRODUCTION OF TAX CLAIMS FOR DEPENDENT PARENTS IS PUBLISHED IN THE GOVERNMENT GAZETTE TODAY (FRIDAY).

THIS FOLLOWS AN UNDERTAKING GIVEN BY THE FINANCIAL SECRETARY, MR. PHILIP HADDON-CAVE, DURING THE BUDGET DEBATE IN APRIL TO INTRODUCE AN AMENDING BILL +LATER THIS YEAR+ CONTAINING PROPOSALS FOR SUCH AN ALLOWANCE TO BE EFFECTIVE FROM THE 1979/80 YEAR OF ASSESSMENT.

THE INLAND REVENUE (AMENDMENT) (NO. 5) BILL 1978 WILL BE INTRODUCED INTO THE LEGISLATIVE COUNCIL DURING THE TWO-DAY SITTING ON WEDNESDAY AND THURSDAY OF NEXT WEEK.

A GOVERNMENT SPOKESMAN SAID THAT THE MAIN FEATURES OF THE

PROPOSALS WERE:

(1)

THE ALLOWANCE WOULD BE GRANTED IN RESPECT OF

A TAXPAYER'S PARENTS (INCLUDING THE PARENTS OF THE TAXPAYER'S SPOUSE) WHO WERE PERMANENT RESIDENTS IN HONG KONG AND

(A) WERE EITHER OVER 60 YEARS OF AGE OR

WERE ELIGIBLE FOR A DISABILITY ALLOWANCE- AND

(B) WERE EITHER IN RECEIPT OF $1,200 A YEAR

IN CASH FROM THE TAXPAYER OR HAD LIVED RENT-FREE WITH THE TAXPAYER FOR NOT LESS THAN 6 MONTHS IN THE YEAR OF ASSESSMENT-

(11) THE ALLOWANCE WOULD BE GRANTED IRRESPECTIVE OF

THE PARENTS' INCOME-

III) THE TERM +PARENT+ WOULD INCLUDE PERSONS BY

WHOM THE TAXPAYER WAS LEGALLY ADOPTED AND STEP-PARENTS-

(IV) THE ALLOWANCE IN RESPECT OF ANY PARENT WOULD BE GRANTED TO ONE TAXPAYER ONLY. WHERE MORE THAN ONE TAXPAYER WAS ENTITLED TO CLAIM THE ALLOWANCE IN RESPECT OF A PARENT. THE CLAIMANTS WOULD HAVE TO DECIDE BETWEEN THEMSELVES WHICH OF THEM WAS TO CLAIM- AND

(v)

THE ALLOWANCE WOULD BE A FLAT $4,000 PER PARENT.

THE SPOKESMAN SAID IMPLEMENTATION OF THE ALLOWANCE FROM APRIL 1, 1979, FOR 1978-79 FINAL ASSESSMENT AND 1979-80 PROVISIONAL ASSESSMENT WOULD COST AN ESTIMATED $60.7 MILLION DURING THE NEXT FINANCIAL YEAR AND $37.5 MILLION A YEAR THEREAFTER. THERE WOULD ALSO BE ADDITIONAL STAFF COSTS TO ADMINISTER THE SCHEME, HE SAID.

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