XN000022-1985-03-28 — Page 17

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THURSDAY, MARCH 28, 1985

MRS FAN BELIEVED THE ANSWER LAY IN APPROPRIATE TRAINING FOR THE TRAINERS - THE TEACHERS AND SCHOOL ADMINISTRATORS.

IF FACED WITH LIMITED RESOURCES, MRS FAN SAID SHE WOULD GIVE PRIORITY TO THE TRAINING OF HEADS OF SCHOOLS, BECAUSE THEY WERE THE LEADERS, THEY TOOK DECISIONS AND MADE POLICIES.

MRS FAN ADDED THAT SHE WAS NOT TRYING TO BELITTLE THE IN-SERVICE TRAINING THAT THE EDUCATION DEPARTMENT WAS PRESENTLY ENGAGED IN BUT SHE FELT THE DEPARTMENT'S TRAINING UNIT, WHICH WAS RESPONSIBLE FOR THIS IMPORTANT AREA OF WORK WAS CLEARLY RESTRAINED BY THE LACK OF RESOURCES AND AS A RESULT, COULD ONLY OFFER TRAINING TO NEW AND INEXPERIENCED HEADS.

TURNING TO THE TAXATION SYSTEM, MRS FAN URGED THE GOVERNMENT TO PLACE PRIORITY ON MAINTAINING OUR CREDIBILITY IN PRESERVING THE BASIC FEATURES OF OUR TAX SYSTEM.

SHE REFERRED TO THE RESERVATIONS SHE EXPRESSED ABOUT THE FINANCIAL SECRETARY'S SUGGESTION IN THE 1984 BUDGET OF TAXING OFF-SHORE INTEREST WHICH COULD BE PERCEIVED AS A DEPARTURE FROM OUR TERRITORIAL SOURCE TAXATION CONCEPT.

+ WAS AFRAID THAT THESE MEASURES MAY NOT BE ADVANTAGEOUS TO HONG KONG IN PRESERVING OUR REPUTATION AND POSITION AS BEING THE THIRD LARGEST FINANCIAL CENTRE IN THE WORLD.

+ IT IS WITH REGRET THAT I NOTED THE NUMEROUS REPRESENTATIONS AGAINST THE SAID BILL AFTER ITS ENACTMENT, AND THAT THERE WAS A SIGNIFICANT DECREASE IN THE NUMBER OF COMPANIES REGISTERED IN HONG KONG BY OVERSEAS INVESTORS SINCE THE PUBLICATION OF THE REVISED

INLAND REVENUE DEPARTMENTAL INTERPRETATION AND PRACTICE NOTES NO. 13 IN SEPTEMBER 1984, SHE SAID.

SHE THEREFORE WELCOMED THE FINANCIAL SECRETARY'S REMARK IN THE BUDGET SPEECH THAT +SOME OF THE REPRESENTATIONS HAVE MERITS AND MAY WELL REQUIRE FURTHER AMENDMENTS TO THE LAW.+

+ I SINCERELY HOPE THAT THE NEW AMENDMENT WILL TAKE CARE OF THE VALID RESERVATIONS AND REPRESENTATIONS FROM THE PUBLIC, AND WILL CLEARLY PRESERVE OUR TERRITORIAL SOURCE TAXATION CONCEPT,+ SHE SAID.

ON THE INTRODUCTION OF ANTI-AVOIDANCE LEGISLATION, MRS FAN SAID SHE FOUND THE PHRASE +TOTALLY EFFECTIVE DEFENCE+ WORRYING, NOT BECAUSE SHE DOUBTED WHETHER THIS OBJECTIVE WAS ATTAINABLE BUT RATHER BECAUSE IN THE COURSE OF TRYING TO ACHIEVE THIS, OUR COMPARATIVELY SIMPLE TAXATION SYSTEM MIGHT EVOLVE INTO A COMPLICATED MAZE WHICH HAD THE EFFECT OF FRIGHTENING AWAY THE GENUINE INVESTORS AND AT THE SAME TIME, CREATING OTHER LOOPHOLES FOR TAX AVOIDANCE.

/+IF EFFECTIVE