XN000022-1983-03-24 — Page 10

THURSDAY, MARCH 24, 1983

GOVERNMENT SHOULD TRACE INCOME OF HK-REGISTERED COMPANIES

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THE HON MARIA TAM URGED THE GOVERNMENT TO TRACE THE INCOME OF COMPANIES REGISTERED IN HONG KONG AND OBTAIN PROPER CONTRIBUTIONS TO TAX REVENUE,

SHE SAID THAT THIS POSSIBILITY +SHOULD BE SERIOUSLY EXPLORED IN ORDER TO PROMOTE SOLVENCY, NOT SOFT-HEARTEDNESS.+

MISS TAM WAS COMMENTING ON THE FOOTNOTE TO A PARAGRAPH OF THE FINANCIAL SECRETARY'S SPEECH WHICH GIVES EXAMPLES WHERE SOME COMPANIES REGISTERED IN HONG KONG PAY LITTLE TAX.

THE FOOTNOTE STATES THAT AS A RESULT, +MANY PEOPLE WHO CARRY ON BUSINESS HAVE LITTLE OR NO OTHER CONTRIBUTION TO THE EXCHEQUER.+

IT MIGHT BE VIRTUALLY IMPOSSIBLE TO ASSESS THE TAX ON THE INCOME OF A HAWKER OR A FREE-LANCING ELECTRICIAN, SHORT OF SHIFTING THE BURDEN OF PROOF OF THEIR ACTUAL INCOME TO THESE INDIVIDUALS, SHE SAID.

SHE NOTED FROM THE FINANCIAL SECRETARY'S SPEECH THAT 270 000 PERSONS PAID SALARIES TAX IN HONG KONG AND FROM AN ARTICLE IN THE 1983 HONG KONG ANNUAL REPORT THAT THERE WERE ONLY ABOUT 218 000 PERSONS LIABLE TO SALARY TAX.

+BUT IT SEEMS CLEAR THAT THERE ARE PROBABLY A LOT OF INGENIOUS PEOPLE IN HONG KONG WHO MANAGE TO AVOID TAX AND BECOME TOTALLY INVISIBLE TO THE REVENUE DEPARTMENT, SHE SAID.

ON THE INCREASE IN FEES FOR VEHICLE LICENCES, MISS TAM SAID: +1 AM UNCONVINCED THAT WE CAN REALLY DISTINGUISH THE REAL MOTIVE BEHIND THE INCREASES IN MAY 1982 AND MARCH 1983, AND I CANNOT SUPPORT THE FISCAL MEASURES NOW IMPOSED.

SHE EXPRESSED THE SAME VIEW ABOUT THE INCREASE IN THE DUTY ON HYDROCARBON OIL.

+ IT IS DIFFICULT TO ACCEPT THAT THE FISCAL MEASURES NOW EFFECTED TO INCREASE THE DUTY RATES ON MOTOR SPIRIT FROM $1.20 TO $2 A LITRE AND ON DIESEL OIL FROM 35 CENTS TO $1 A LITRE HAVE NO ULTERIOR PURPOSE AS A MEANS OF FURTHER RESTRAINING OWNERSHIP OF VEHICLES BY FISCAL MEASURES.

+WHILE THE MAY 1982 INCREASES REMAIN AN EFFECTIVE DETERRENT, I THINK IT IS FISCALLY INEQUITABLE TO IMPOSE FURTHER INCREASES AND 1 CANNOT SUPPORT SUCH MEASURES..

+ THE INCREASE IN GOODS VEHICLE LICENCES AND DIESEL OIL DUTY WILL PROBABLY LEAD TO INCREASES IN FREIGHT TRANSPORTATION COSTS AND

AXI FARES, SHE SAID.

THE MIDDLE INCOME FAMILIES - THOSE WHO CANNOT ENJOY THE BENEFIT OF ANY PUBLIC OR HOME OWNERSHIP HOUSING SCHEME - HOULD HAVE TO GIVE UP THE IDEA OF OWNING A CAR CR CUT DOWN ON THE IR TAXI TRIPS IN ORDER TO SPEND THEIR SA GS . HOME MORTGAGES, SHE SAID.

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/CH SEPARATE

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