XN000022-1989-04-26 — Page 24

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WEDNESDAY, APRIL 26, 1989

EVEN

PAYING TAXES.

SHE SAID THAT SOME COMPANIES AND THEIR EMPLOYEES WERE NOT AWARE THAT THEY COULD BE REQUIRED TO PAY, OR SHOULD BE TO BOTH THE CHINESE AND THE HONG KONG GOVERNMENTS.

"IF THEY WERE, THEY COULD REALISE THAT THE ECONOMICS OF THE

LEAD BUSINESS ARE NOT THERE. THIS COULD

TO THEIR RELOCATING THEIR

SHE SAID. BASES TO ANOTHER COUNTRY WHICH HAS A TAX TREATY WITH CHINA,"

SHE SAID IT WAS NOW THE TIME FOR THE HONG KONG AND THE CHINESE

MEMORANDUM OF GOVERNMENTS TO ENTER INTO A

UNDERSTANDING ON DOUBLE TAXATION TO PUT HONG KONG COMPANIES AND RESIDENTS ON AN EQUAL FOOTING WITH THOSE COUNTRIES THAT HAD TAX TREATIES WITH CHINA.

SHOULD SHE SAID ANOTHER AREA WHICH

BE REVIEWED WAS SHARES PROFITS OF OVERSEAS INVESTORS DERIVED FROM DEALING IN HONG KONG STOCK MARKET SHOULD BE TAXED.

WHETHER IN THE

TAXED SHE NOTED THAT AS A GENERAL RULE. THESE PROFITS WERE NOT

IN SHARES BECAUSE IT HAD NOT BEEN MADE CLEAR THAT CONSISTENT DEALING AMOUNTED TO CARRYING ON A TRADE OR BUSINESS.

SHE SAID THAT IN HER VIEW, THERE WAS A NEED TO CLARIFY WHETHER OR NOT THESE ACTIVITIES WERE TAXABLE.

MRS FONG SAID THERE WAS ALSO A NEED TO REVIEW THE TAXATION OF BENEFITS-IN-KIND.

SHE NOTED THAT IN THE PAST, INLAND REVENUE ORDINANCE REVIEW

UP BY COMMITTEES WERE SET

THE GOVERNMENT ΤΟ EXAMINE THE INLAND REVENUE ORDINANCE AND HAD SUGGESTED WAYS TO IMPROVE THE ORDINANCE.

THE LAST REVIEW COMMITTEE PRESENTED ITS REPORT IN TO THAT, REPORTS WERE PRESENTED IN 1967 AND 1954.

REVIEW.

1976. PRIOR

MRS FONG SAID THAT IT WAS NOW CLEARLY THE TIME FOR ANOTHER

ON SALES TAX, SHE SAID THAT THE ADVANTAGES OF INCREASING THE CLEAR, BUT IT PERCENTAGE OF TAX COLLECTION FROM INDIRECT TAXES WERE WOULD BE ILL-ADVISED TO THINK THAT A GENERAL SALES TAX WAS THE SOLUTION AND TO IGNORE OTHER SERIOUS IMPLICATIONS.

"IT IS NOT ENOUGH FOR THE GOVERNMENT TO PROPOSE A SALES TAX AND THEN PUBLISH A CONSULTATIVE DOCUMENT.

"THE GOVERNMENT SHOULD APPOINT A SPECIAL COMMITTEE ΤΟ EXAMINE THE ISSUE, WEIGHING THE ADVANTAGES AND

OF IMPOSING A SALES TAX AND LOOKING AT OTHER FEASIBLE ALTERNATIVES," SHE SAID.

DISADVANTAGES

TURNING TO THE PROPOSED ISSUANCE OF EXCHANGE FUND BILLS, SHE SAID THE GOVERNMENT SHOULD BE FREE TO ISSUE BILLS то FINANCE LARGE CAPITAL PROJECTS OR MERELY TO ACT AS MONETARY INSTRUMENTS.

/BUT SHE