XN000022-1981-04-09 — Page 7

THURSDAY, APRIL 9, 1981

6.

+ IT WOULD NEVER BE ADVANTAGEOUS FOR COUPLES TO OPT FOR SEPARATE ASSESSMENT ON INCOMES WHICH WERE BELOW $55 000 FOR COUPLES WITHOUT CHILDREN, $62 000 FOR COUPLES WITH ONE CHILD, $67 000 FOR COUPLES WITH TWO CHILDREN AND $81 000 FOR COUPLES WITH TWO CHILDREN AND TWO DEPENDENT PARENTS, IRRESPECTIVE OF THE INCOME SPLIT.

+SEPARATE ASSESSMENT, IN FACT, WOULD BE DISADVANTAGEOUS IN MOST SITUATIONS (EXCEPT SOME STANDARD RATE CASES) WHERE, IN THE CASE OF A COUPLE WITH NO CHILDREN, THE INCOME OF ONE OF THE SPOUSES IS BELOW $22 500 OR WHERE THE INCOME OF THE SPOUSE WHO MAINTAINS THE CHILDREN AND DEPENDENT PARENTS IS BELOW A FIGURE OF $22 500 PLUS CHILD ALLOWANCES AND DEPENDENT PARENTS ALLOWANCES.+

SIR PHILIP SAID THE ESTIMATED NUMBER OF WORKING WIVES IN THE TAX NET IN 1980-81 WAS 66 000 OF WHOM THE COMMISSIONER OF INLAND REVENUE ESTIMATED ONLY 20 000 WOULD BENEFIT FROM SEPARATE ASSESSMENT, OR RATHER LESS THAN 6 PER CENT OF THE TOTAL NUMBER OF PERSONS WHO PAY SALARIES TAX.

ON THE REMOVAL OF THE HALF PERCENTAGE POINT LOADING LEVIED WITH EFFECT FROM THE YEAR OF ASSESSMENT 1976-77 ON THE SURCHARGE OF ONE-AND-A-HALF PERCENTAGE POINTS ON THE STANDARD RATE OF CORPORATION PROFITS TAX, THE FINANCIAL SECRETARY SAID IT WAS NOT SO MUCH AS A CONCESSION AS SUCH BUT RATHER BECAUSE ITS CONTINUANCE WAS NO LONGER JUSTIFIED.

+ IT IS NO PART OF OUR FISCAL POLICY TO PERSEVERE WITH THE IMPOSITION OF A LEVY, DECLARED AT THE OUTSET TO BE TEMPORARY, WHEN CIRCUMSTANCES CHANGE.+

HE STRESSED THAT THE MOVE WAS NOT DESIGNED TO STRENGTHEN OUR COMPETITIVE POSITION VIS-A-VIS OTHER MAJOR CITIES IN SOUTH EAST ASIA, NOR WAS IT DESIGNED TO ENHANCE THE STATUS OF HONG KONG AS A FINANCIAL CENTRE.

+AGAIN, IT IS NO PART OF OUR FISCAL POLICY TO ADAPT OUR REVENUE LAWS, LET ALONE OUR TAX RATES, SPECIFICALLY TO ATTRACT PARTICULAR TYPES OF BUSINESS HERE.

+THE SAME PRINCIPLE LIES BEHIND THE PROPOSED IMPROVED DEPRECIATION ALLOWANCES: THEY ARE DESIGNED TO ENCOURAGE MANUFACTURERS AND OTHERS TO RE-EQUIP AND UPGRADE THE IR PLANT AND EQUIPMENT TO ASSIST THE DIVERSIFICATION PROCESS GENERALLY AND NOT SPECIFICALLY TO MAKE HONG KONG A MORE ATTRACTIVE PLACE FOR INVESTMENT, HE ADDED.

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