XN000022-1985-11-28 — Page 6

THURSDAY, NOVEMBER 28, 1985

HK'S INTERNATIONAL STATUS NEEDS TO BE MAINTAINED

*****

THE MAINTENANCE AND STRENGTHENING OF HONG KONG'S STATUS AS AN INTERNATIONAL CENTRE MUST ALWAYS BE AN OBJECTIVE OF THE HIGHEST PRIORITY FOR THE GOVERNMENT, NOW AND IN FUTURE, THE HON RITA FAN SAID TODAY (THURSDAY).

SPEAKING ON THE SECOND DAY OF THE POLICY DEBATE, MRS FAN SAID THE REALISATION OF THIS OBJECTIVE WAS ALSO THE MOST PRACTICAL AND SENSIBLE WAY TO PRESERVE OUR FREEDOM AND LIFE STYLE, AND TO IMPROVE THE LIVING STANDARD OF ALL OUR CITIZENS.

MRS FAN SAID THE TAXATION SYSTEM AND SIXTH FORM EDUCATION WERE TWO OF THE NECESSARY AND CONTRIBUTING FACTORS TO ACHIEVE THIS OBJECTIVE.

SHE SAID SHE WELCOMED THE STATEMENT THAT BOTH THE GOVERNMENT AND THE BUSINESS COMMUNITY REMAIN IN FULL AGREEMENT ON THE NEED FOR A SIMPLE AND EQUITABLE SYSTEM+, SAYING IT WAS WITH THESE BASIC FEATURES IN OUR TAXATION SYSTEM THAT HONG KONG MIGHT STRENGTHEN ITS POSITION AS AN INTERNATIONAL FINANCIAL CENTRE,

+THE FACT THAT WE ONLY LEVY TAX ON PROFITS ARISING IN OR DERIVED FROM HONG KONG IS PARTICULARLY WELCOMED AND HAS BEEN RECOGNISED BY BUSINESS ORGANISATIONS THAT OUR TAXATION SYSTEM IS EQUITABLE,+ SHE SAID.

NOTING THAT TAXING PROF ITS AT SOURCE HAD CONTRIBUTED TO THE SUCCESS OF HONG KONG AS A MAJOR FINANCIAL CENTRE, SHE URGED THAT THIS TERRITORIAL SOURCE CONCEPT IN OUR TAX SYSTEM MUST BE PRESERVED.

SHE RECALLED THAT SHE HAD EXPRESSED STRONG RESERVATIONS ABOUT THE INLAND REVENUE (AMENDMENT) ORDINANCE 1984 WHICH COULD REPRESENT A DEPARTURE FROM THE TERRITORIAL SOURCE CONCEPT AND CREATE COMPLEXITIES IN THE TAX SYSTEM.

MRS FAN SAID SHE REGRETTED TO NOTE THAT THE 1985 DRAFT BILL CREATED FURTHER COMPLICATIONS TO THE SYSTEM.

SHE CALLED ON THE ADMINISTRATION TO GIVE DUE CONSIDERATION TO THE MANY REPRESENTATIONS TO UMELCO AND TO CONSIDER CAREFULLY THE NEED TO AMEND THE INLAND REVENUE (AMENDMENT) ORDINANCE 1984 REGARDING THE TAXING OF OFF-SHORE INTEREST.

SHE SAID HONG KONG MIGHT NEED AN INCREASE IN REVENUE AND IT WAS PROBABLY DUE TO THIS REASON THAT RAMIFICATIONS HAD BEEN MADE TO OUR TAX SYSTEM.

HOWEVER, THE GOVERNMENT MUST WEIGH CAREFULLY THE VALUE OF OUR INTERNATIONAL REPUTATION AGAINST THE SHORT TERM INCREASE IN REVENUE, MRS FAN SAID.

TURNING TO THE COMMITMENT OF THE GOVERNMENT TOWARDS THE IMPROVEMENT OF THE QUALITY OF EDUCATION, SHE SAID SIXTH FORM EDUCATION WAS AN AREA WHERE THIS COULD BE MADE.

VIN VIEW