XN000022-1988-07-06 — Page 39

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WEDNESDAY, JULY 6, 1988

RESULT LARGELY AS A

OF THE PROPOSED NEW ARRANGEMENTS FOR REDUCTION IN THE STORES, SUPPLIES AND EQUIPMENT, AND THE ANTICIPATED

$800 MILLION OVER SCOPE OF THE WORKS SERVICES PROGRAMME, SAVINGS OF THE LIFE OF THE NEW AGREEMENT WERE IDENTIFIED.

IN A COST TO THE LIE OF THE

HOWEVER, THERE WERE ADJUSTMENTS WHICH RESULTED THE HONG KONG GOVERNMENT OF SOME $500 MILLION OVER NEW AGREEMENT.

AGREEMENT

ONE OF THESE STEMMED FROM THE HONG KONG GOVERNMENT'S

AND TO MAKE A RECONCILIATION PAYMENT IN RESPECT OF UNITED KINGDOM VAT

ALLOWANCES PAID BY THE MOD TO HONG KONG SALARIES TAX DUE ON THE MILITARY PERSONNEL SERVING IN HONG KONG UNDER THE 1981 AGREEMENT.

TODAY APPROVED THE CREATION FOR THIS, THE FINANCE COMMITTEE

SUBHEAD * 1981 DEFENCE COSTS UNDER HEAD 34 OF A NEW CAPITAL ACCOUNT AGREEMENT: RECONCILIATION OF VAT AND SALARIES TAX ON ALLOWANCES'

PROVISION OF AND A COMMITMENT

$266 MILLION TO PROVIDE SETTLEMENT OF THE DISPUTE UNDER THE 1981 DCA.

FOR

WITH

THE

STATUS OF VAT THE HONG KONG GOVERNMENT HAS ACCEPTED THAT THE

1981 DCA, PAYMENTS MADE BY MOD WAS NOT CLEARLY ESTABLISHED UNDER THE

ISSUE ON THE AND HAS AGREED TO SETTLE THE

UNDERSTANDING THAT VAT THE GARRISON UNDER

WOULD NOT BE A LEGITIMATE CHARGE TO THE COSTS OF THE 1988 DCA.

FURTHER

ADJUSTMENTS WERE NECESSARY AS A

RESULT OF ΤΟ MEET 100 PER CENT OF THE AGREEMENT BY BOTH GOVERNMENTS OF CERTAIN ITEMS WHICH FALL OUTSIDE THE COSTS TO BE APPORTIONED.

ARE ADDED BACK, THE TOTAL WHEN THESE ADDITIONAL COSTS SAVING TO HONG KONG GOVERNMENT OF THE NEW DCA IS $1,700 MILLION.

THE COST

NET

AT THE TOTAL COST OF THE NEW DCA IS ESTIMATED

1997. FOR THE PERIOD APRIL 1, 1988 TO JUNE 30,

$9,500

MILLION

WORKS

UNDER APPROVED

HEAD 34 FOR EXCLUDING THE PROVISION ALREADY SERVICES, THE TOTAL ESTIMATED HONG KONG GOVERNMENT'S IN THE CURRENT FINANCIAL CONTRIBUTION TO THE COSTS OF THE GARRISON YEAR IS $1,673 MILLION.

65 PER CENT COSTS AND OF VAT AND

$266 HONG

THIS TOTAL COMPRISES $1,407 MILLION TO COVER THE HONG KONG GOVERNMENT'S CASH CONTRIBUTION TOWARDS DCA MILLION TO COVER THE ONE-OFF SETTLEMENT IN RESPECT KONG SALARIES TAX ON ALLOWANCES ARISING OUT OF THE 1981 DCA.

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