XN000022-1986-04-16 — Page 8

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WEDNESDAY, APRIL 16, 1986

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HE SAID THE NEW PROVISIONS WERE IN THE MAIN IDENTICAL TO THOSE EXISTING PRIOR TO THE 1984 AMENDMENTS.

BUT THE OPPORTUNITY HAD BEEN TAKEN TO ADD A NEW SECTION +TO MAKE IT CLEAR THAT FOR FINANCIAL INSTITUTIONS GAINS OR PROFITS ON TRANSACTIONS IN CERTIFICATES OF DEPOSIT AND BILLS OF EXCHANGE WILL CONTINUE TO BE CHARGEABLE NOTWITHSTANDING THE FACT THAT THE TRANSACTION MAY HAVE TAKEN PLACE OUTSIDE HONG KONG, HE SAID.

+THE AMENDMENTS TAKE EFFECT FROM APRIL 1, 1986 AND THE ESTIMATEL COST TO THE REVENUE IS ABOUT $200 MILLION IN 1986-87 AND $150 MILLION PER ANNUM THEREAFTER, +

AS REGARDS PERSONAL TAXATION, TWO CONCESSIONS HAD BEEN PROPOSED IN THE BUDGET, HE SAID. +FIRSTLY: TO INCREASE THE ADDITIONAL PERSONAL ALLOWANCE FROM $7 500 TO $8 500 FOR SINGLE PERSONS AND FROM $17 000 TO $19 000 FOR MARRIED PERSONS, THEREBY INCREASING TOTAL PERSONAL ALLOWANCES TO $29 000 FOR A SINGLE PERSON AND $60 JJJ FOR A MARRIED COUPLE.+

+SECONDLY: TO INCREASE THE BASIC DEPENDENT PARENT ALLOWANCE FROM $8 000 TO $9 000, THEREBY BRINGING THE TOTAL ALLOWANCE AVAILABLE IN RESPECT OF A DEPENDENT PARENT LIVING WITH THE TAXPAYER TO $12 000.+

SIR JOHN NOTED THAT ALTHOUGH THESE CONCESSIONS DID NOT GO FURTHER, THEY HAD GENERALLY BEEN SEEN AS REASONABLE, BOTH BY MEMBERS OF THE COUNCIL AND BY THE PUBLIC.

+ IN FACT THEY SHOULD BENEFIT OVER 600 000 PERSONS EITHER BY REMOVING OR REDUCING THEIR LIABILITY TO SALARIES TAX AS WELL AS A FURTHER 30 000 WHO ELECT TO BE ASSESSED UNDER PERSONAL ASSESSMENT, HE SAID.

A TRANSITIONAL PROVISION WAS ALSO INCLUDED IN THE BILL TO ENSURE THAT PROVISIONAL SALARIES TAX FOR THE YEAR OF ASSESSMENT COMMENCING ON APRIL 1, 1986 IS BASED UPON THE NEW ALLOWANCES.

+THE COST TO REVENUE OF THE TWO MEASURES IS ESTIMATED AT $127 MILLION IN 1986-87 AND $180 MILLION PER ANNUM THEREAFTER, + SIR JOHN ADDED.

DEBATE ON THE BILL WAS ADJOURNED.

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