XN000022-1986-11-05 — Page 36

WEDNESDAY, NOVEMBER 5, 1986

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+ IN ADDITION, THE GOVERNMENT WILL HAVE TO TAKE UP THE RESPONSIBILITY OF MANAGING THIS FUND WHICH WOULD GROW ANNUALLY AND IT WOULD SURELY BE A PAINSTAKING TASK TO HANDLE THE MATTER, HE SAID.

MOREOVER, GOVERNMENT'S REVENUE WOULD DEFINITELY BE REDUCED SUBSEQUENT TO THE SETTING UP OF THE FUND, HE ADDED.

HE THEREFORE SUGGESTED THE GOVERNMENT SHOULD CONSULT BOTH EMPLOYERS AND EMPLOYEES ON THE IR VIEWS WHEN THEY CONSIDERED SUCH A PROPOSAL.

MEANWHILE, MR NGAI SAID HE SUPPORTED A PROPOSAL BY THE INDUSTRIAL AND COMMERCIAL SECTOR ON REDUCING THE COMPANY PROF ITS TAX RATE WITH A VIEW TO ATTRACTING MORE FOREIGN INVESTMENT.

IT SHOULD BE REASONABLE AND TIMELY TO BRING THE TAX RATE BACK TO ITS ORIGINAL LEVEL SINCE THE GOVERNMENT ONCE MORE HAD A BALANCED BUDGET, HE SAID.

MR NGAI CONSIDERED REDUCING THE COMPANY PROFITS TAX RATE BY TWO PER CENT WOULD BRING POSITIVE EFFECTS AS HONG KONG WAS FACING KEEN COMPETITION FROM DEVELOPING COUNTRIES AND THAT THE LOCAL TAXATION SYSTEM DID NOT PROVIDE THE PRIVILEGE OF A TAX EXEMPTION PERIOD FOR NEW INVESTMENT.

+ IF HONG KONG SHOULD BE ABLE TO ATTRACT MORE FOREIGN INVESTMENT, IT WILL IN THE LONG RUN CONVINCE PEOPLE TO PLACE MORE CONFIDENCE IN THE FUTURE, HE SAID.

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