XN000022-1978-11-15 — Page 3

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WEDNESDAY, NOVEMBER 15, 1978

IN ADDITION, MR. HADDON-CAVE SAID HE IS SATISFIED THAT

THE SELECTION OF THE QUALIFYING AGE OF 60 DOES REFLECT THE GENERAL RETIREMENT AGE IN THE COMMUNITY, AND IT IS ALSO IN LINE WITH THE LIMITS IMPOSED IN OTHER COUNTRIES WITH SIMILAR PROVISIONS FOR ALLOWANCES TO RECOGNISE DEPENDENCY.

ON THE SUGGESTIONS TO REMOVE THE CONDITION THAT THE PARENT MUST BE A PERMANENT RESIDENT IN HONG KONG, MR. HADDON-CAVE SAID SUCH REMOVAL WOULD MAKE IT EXTREMELY DIFFICULT TO ADMINISTER THE SCHEME.

+ IT IS ESSENTIAL TO MINIMISE THE POSSIBILITY OF ABUSE AND TO LIMIT THE COMMISSIONER'S MONITORING ROLE TO THE ABSOLUTE MINIMUM,+ HE SAID.

MR. HADDON-CAVE POINTED OUT THAT THE PROPOSED ALLOWANCE WILL EFFECTIVELY REDUCE THE TAX LIABILITY OF THOSE WITH DEPENDENT PARENTS. THE EXTENT OF THE RELIEF BEING DETERMINED BY THE CIRCUMSTANCES OF EACH INDIVIDUAL TAXPAYER.

HE NOTED THAT THE TAX THRESHOLD OF A MARRIED TAXPAYER WITH TWO CHILDREN AND TWO DEPENDENT PARENTS WILL BE PUSHED UP FROM $31,000 A YEAR TO OVER $38,000, AND THE TAX LIABILITY OF SUCH A TAXPAYER WILL BE REDUCED BY NEARLY 79 PER CENT, OR $412 ON A SALARY OF $40,000 A YEAR BY OVER 50 PER CENT, OR $887 ON A SALARY OF $50,000 A YEAR AND BY NEARLY 37 PER CENT, OR $1,350, ON A SALARY OF $60,000 A YEAR.

THE FINANCIAL SECRETARY PROPOSED THAT THE ALLOWANCE SHOULD APPLY TO 1978-79 FINAL ASSESSMENTS AND 1979-80 PROVISIONAL ASSESSMENTS.

THE LOSS OF REVENUE WILL BE ABOUT $61 MILLION IN THE FINANCIAL YEAR 1979-80 AND $37.5 MILLION A YEAR THEREAFTER, ADDITION TO THE COST OF ADMINISTRATION REQUIRED TO ADMINISTER THE SCHEME, HE ADDED,

DEBATE ON THE BILL WAS ADJOURNED.

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