XN000022-1981-02-25 — Page 7

+

WEDNESDAY, FEBRUARY 25, 1981

5

SIR PHILIP ALSO PRESENTED A TABLE COMPARING HIS PROPOSED TAXES WITH SINGAPORE, MALAYSIA AND THE U.K. A SINGLE PERSON EARNING $36 000 WOULD PAY 2.4 PER CENT IN HONG KONG ($850), 6.7 PER CENT IN SINGAPORE (HK$2 427), 8.4 PER CENT IN MALAYSIA (HK$3 037) AND 15.7 PER CENT IN THE U.K. (HK$5 644). SIMILARLY, A MARRIED PERSON WITH NO CHILDREN AND EARNING $120 000 A YEAR WOULD PAY 11.5 PER CENT IN HONG KONG ($13 750), 18.4 PER CENT IN SINGAPORE (HK$22 137), 24.4 PER CENT IN MALAYSIA (HK$29 232) AND 23.3 PER CENT IN THE U.K. (HK$27 956). THE COMPARISON DOES NOT INCLUDE COMPULSORY LEVIES SUCH AS THE UK NATIONAL INSURANCE CONTRIBUTION, THE PAYROLL TAX IN SINGAPORE AND CAPITAL GAINS TAX IN THE UK AND MALAYSIA.

THE FINANCIAL SECRETARY SAID SOMEWHAT VOCIFEROUS CLAIMS HEARD RECENTLY TO THE EFFECT THAT OUR DIRECT TAX SYSTEM IS ONE WHERE IN THE RICH ARE SUBSIDISED BY THE 'POOR', BUT THE RESPECTIVE CONTRIBUTIONS TO THE REVENUE OF SALARIES TAX AND PROF ITS TAX JUST DO NOT SUPPORT SUCH CLAIMS.

ON THE CONTRARY, HE SAID, OVER THE YEARS, THE CONTRIBUTION FROM PROFITS TAX HAD OUTSTRIPPED THAT FROM SALARIES TAX. THUS IN 1979-80, THE CONTRIBUTION FROM PROF ITS TAX AMOUNTED TO 67 PER CENT OF THE TOTAL COLLECTIONS OF EARNINGS AND PROF IT TAXES COMPARED WITH ONLY 22 PER CENT FROM SALARIES TAX, + HE SAID.

IN 1980-81 THE CONTRIBUTION FROM PROFITS TAX WAS NO LESS THAN 69 PER CENT WHILE THAT FROM SALARIES TAX, DESPITE FISCAL DRAG, HAD DECLINED TO 18 PER CENT.

REVENUE TO TOP $33 700 M IN 1981/82

******

THE TOTAL REVENUE COLLECTIONS FOR THE COMING FINANCIAL YEAR, AFTER ADJUSTMENTS ON CAPITAL ACCOUNT, WILL BE $33 774 MILLION, AN INCREASE OF $4 774 MILLION, OR 16.5 PER CENT, ON THE REVISED ESTIMATE FOR 1980/81.

OF THESE, ABOUT $21 842 MILLION WILL BE IN RECURRENT REVENUE AND $11 932 IN CAPITAL REVENUE.

IN HIS BUDGET SPEECH IN THE LEGISLATIVE COUNCIL TODAY, THE FINANCIAL SECRETARY, THE HON SIR PHILIP HADDON-CAVE, SAID INCOME FROM DIRECT TAXES WILL AMOUNT TO $10 005 MILLION, AN INCREASE OF $1 970 MILLION, OR 24.5 PER CENT, ON THE REVISED ESTIMATE FOR 1980/81 OF $8 035 MILLION, WHICH WAS 40 PER CENT UP ON ACTUAL COLLECTIONS IN 1979/80.

+SUCH HAS BEEN THE GROWTH RATE OF MONEY INCOMES IN RECENT YEARS, PARTICULARLY IN THE FINANCIAL AND RELATED BUSINESS SERVICES AND PROPERTY SECTORS, SIR PHILIP REMARKED.

HE ESTIMATED THAT REVENUE FROM PROF IT TAX WOULD GO UP BY 20 PER CENT TO $6 675 MILLION AS TOTAL PROFITS ASSESSABLE TO TAX IN 1981/82 WOULD BE AROUND 25 PER CENT HIGHER THAN PROF ITS ASSESSED TO TAX IN 1980/81.

/+HOWEVER