XN000022-1981-05-13 — Page 13

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WEDNESDAY, MAY 13, 1981

ANOTHER COUNCILLOR THE HON JOHN SWAINE, POINTED OUT THAT ONE MAJOR PROVISION OF THE AMENDING BILL IS THE INCLUSION IN SECTION 15 OF THE PROF ITS DERIVED FROM THE SALE, DISPOSAL OR REALISATION OF CERTIFICATES OF DEPOSIT AS PART OF THE DEEMED TRADING RECEIPTS OF THE TAXPAYER.

HE QUOTED THE ACTING FINANCIAL SECRETARY AS SAYING, WHEN INTRODUCING THE BILL, THAT THE NEW PROVISIONS WOULD IN NO WAY BREACH THE TERRITORIAL SOURCE CRITERION, AND THE TRADITIONAL PROVISION OF CREDIT TEST USED IN DETERMINING THE ASSESSABILITY TO TAX OF INTEREST PAYMENTS WOULD BE APPLIED TO THOSE

INSTRUMENTS.

+THIS TEST WOULD BRING WITHIN THE TAX NET THOSE CERTIFICATES OF DEPOSIT WHICH ORIGINATED IN HONG KONG, WHATEVER THE IR CURRENCY OF DENOMINATION, AND WOULD EXCLUDE THOSE WHICH ORIGINATED OUTSIDE HONG KONG.+ AS A RESULT, MR SWAINE SAID, FOREIGN CURRENCY CERTIFICATES OF DEPOSIT ISSUED OFF-SHORE WILL CONTINUE TO ESCAPE THE TAX NET, FOREIGN CURRENCY CERTIFICATES AND HONG KONG DOLLARS CERTIFICATES ISSUED

IN HONG KONG WILL BE TAXABLE, BUT HONG KONG DOLLAR CERTIFICATES ISSUED OFF-SHORE WILL NOT BE TAXABLE.

+THERE IS HOWEVER THE PROSPECT OF RELIEF FOR SOME HONG KONG ISSUED CERTIFICATES OF DEPOSIT,+ HE SAID.

MR SWAINE ALSO SAID THAT A COMMITTEE STAGE AMENDMENT WILL BE PROPOSED BY THE GOVERNMENT TO DEEM PROF ITS TO BE INTEREST ON DISPOSAL OF CERTIFICATES OF DEPOSIT BY CORPORATIONS CARRYING ON TRADE OR BUSINESS IN HONG KONG FOR THE PURPOSE OF OBVIATING ANY QUESTION OF CORPORATIONS BEING DOUBLY TAXED, UNDER BOTH INTEREST AND PROFITS TAX.

ICAC HAS RECORD YEAR

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A RECORD TOTAL OF 333 PROSECUTIONS WERE TAKEN TO COURT BY THE INDEPENDENT COMMISSION AGAINST CORRUPTION LAST YEAR, THE HON R.H. LOBO SAID TODAY (WEDNESDAY) AT THE LEGISLATIVE COUNCIL.

AND THERE WERE 233 CONVICTIONS ESTABLISHMENT SEVEN YEARS AGO.

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THE LARGEST NUMBER SINCE ITS

MR LOBO, WHO IS A MEMBER OF THE ICAC COMPLAINTS COMMITTEE, WAS SPEAKING AT THE TABLING OF THE COMMISSION'S ANNUAL REPORT FOR 1980.

DURING THE SAME PERIOD THE COMMISSION RECEIVED OVER 7 000 REPORTS, A QUARTER OF WHICH ALLEGED CORRUPTION.

+THE REST WERE REPORTS INVOLVING A WIDE RANGE OF COMPLAINTS, AND OTHER MATTERS MANY OF WHICH ARE PASSED ON TO THE GOVERNMENT DEPARTMENTS CONCERNED,+ SAID MR LOBO,

/+IT IS