XN000022-1988-05-04 — Page 3

WEDNESDAY, MAY 4, 1988

1987-88 SURPLUS REACHES $10.6 BILLION

* * * *

HONG KONG WILL HAVE A CONSOLIDATED

EARLIER

SURPLUS REVISED

OF $10.6 BILLION ESTIMATE OF $7.6 JACOBS, TOLD THE

THE HON PIERS

FOR 1987-88 COMPARED WITH THE BILLION, THE FINANCIAL SECRETARY, LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

WINDING UP DEBATE ON THE APPROPRIATION BILL 1988, HE SAID SIGNIFICANT GAINS IN PROFITS TAX, COMPANY REGISTRATION FEES AND STAMP DUTY AND VARIOUS OTHER FACTORS HAD SERVED TO INCREASE THE ESTIMATED GENERAL REVENUE ACCOUNT SURPLUS FOR LAST YEAR TO $10.6 BILLION.

MOREOVER, THE TOTAL OF

THE FUND BALANCES WOULD NOW REMAIN GROW BY THE $1.5 BILLION INDICATED

VIRTUALLY STATIC, RATHER THAN

EARLIER.

MR JACOBS SAID WHEN PREPARING THE REVISED ESTIMATE FOR PROFITS TAX YIELDS IN 1987-88, THE GOVERNMENT HAD GOOD REASON TO BELIEVE THAT TAX RECEIPTS IN THE SECOND HALF OF THE YEAR WOULD BE SIGNIFICANTLY AFFECTED BY THE AFTERMATH OF THE OCTOBER STOCK MARKET CRASH.

"THIS HAS NOT, HOWEVER, PROVED TO BE THE CASE AND, AS WE HAVE SEEN, CORPORATE RESULTS HAVE CONTINUED TO GO FROM STRENGTH TO STRENGTH," HE SAID.

"WE HAVE ALSO WITNESSED A REDUCTION IN TAX ARREARS ENCOURAGED, PERHAPS, BY IMPROVED COMPANY LIQUIDITY AND RELATIVELY LOW INTEREST RATES.

TAX

"THE RESULT IS AN IMPROVEMENT IN ESTIMATED PROFITS RECEIPTS FOR THE YEAR FROM THE REVISED ESTIMATE OF $13.1 BILLION TO $15.4 BILLION."

OF LESS SIGNIFICANCE, COMPANY REGISTRATION FEES HAD BREN BOOSTED BY SOME $350 MILLION DUE TO A SUBSTANTIAL ONE-OFF YIELD FROM A MAJOR COMPANY RESTRUCTURING THAT TOOK PLACE TOWARDS THE YEAR END.

IN ADDITION AS STOCK MARKET TURNOVER HAD RECOVERED SHARPLY TOWARDS THE YEAR END, OUT-TURN ON STAMP DUTY AS A RESULT IMPROVED FURTHER FROM THE REVISED ESTIMATE OF $5 BILLION TO $5.3 BILLION.

NEW FINANCING ARRANGEMENTS AUTHORITY WITH EFFECT FROM PREPARATORY ADJUSTMENTS IN

ANOTHER FACTOR CONTRIBUTING TO THE INCREASE IN THE ESTIMATED GENERAL REVENUE ACCOUNT SURPLUS WAS THE WHICH HAD BEEN APPLIED TO THE HOUSING APRIL 1 THIS YEAR WHICH REQUIRED SOME GOVERNMENT ACCOUNTS.

"IN PARTICULAR, .-----.