XN000022-1989-05-24 — Page 15

WEDNESDAY, MAY 24, 1989

HE SAID THE

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MAIN LEGISLATIVE PROVISIONS OF THE BILL WERE CONTAINED IN FIVE CLAUSES:

CLAUSE 3 REPEALS THE EXISTING MANDATORY JOINT TAXATION PROVISIONS AND PROVIDES THAT HUSBANDS AND WIVES WILL BE CHARGEABLE TO TAX ON THEIR RESPECTIVE INCOMES. AT THE SAME TIME IT ALSO SETS OUT THE CONDITIONS UNDER WHICH A MARRIED COUPLE MAY ELECT JOINT ASSESSMENT IF ONE OF THEM HAS ALLOWANCES EXCEEDING INCOME.

CLAUSE 6 PROVIDES THE MECHANICS FOR CALCULATING A COUPLE'S NET CHARGEABLE INCOME WHEN JOINT ASSESSMENT IS ELECTED.

CLAUSE 9 ALLOWS TAXPAYERS TO BE GRANTED A BASIC ALLOWANCE UNLESS THEY ARE ENTITLED TO A MARRIED TAXPAYER ALLOWANCE. WITH THE IMPLEMENTATION OF SEPARATE TAXATION THE WORKING WIFE ALLOWANCE IS REPEALED.

* CLAUSE 10 CONSOLIDATES ALL OF THE PERSONAL ASSESSMENT INTERPRETATION CLAUSES INTO ONE SECTION AND AMENDS THE EXISTING DEFINITION OF "INDIVIDUAL" TO REMOVE THE EXCLUSION OF A MARRIED WOMAN BEING A PERSON ENTITLED TO ELECT PERSONAL ASSESSMENT.

CLAUSE 28 INTRODUCES TRANSITIONAL PROVISIONS ΤΟ DEAL WITH THE VALIDITY OF ASSESSMENTS ISSUED PRIOR TO THE DATE OF COMMENCEMENT OF THE AMENDING LEGISLATION. THE PROVISIONS ALSO DEAL WITH PAYMENT OF TAX ON LUMP SUM PAYMENTS RELATED BACK TO EARLIER YEARS OF ASSESSMENT. ASSESSMENT OF TAXPAYERS LEAVING HONG KONG AND SUBSEQUENTLY RETURNING WITHIN THE TRANSITIONAL YEAR OF ASSESSMENT, OMISSIONS OF INCOME FROM ASSESSMENTS AND THE APPLICATION OF PROVISIONAL SALARIES TAX PAID IN RESPECT OF THE TRANSITIONAL YEAR.

MR NENDICK ESTIMATED THAT THE FULL YEAR COST TO THE REVENUE 1990-91 OF IMPLEMENTING SEPARATE TAXATION TO BE SOME $585 MILLION.

IN

"HOWEVER, WITH THE SIMULTANEOUS ABOLITION OF THE WORKING WIFE

THE WHICH HAS A FULL YEAR COST OF SOME $355 MILLION,

NET ALLOWANCE,

COST OF IMPLEMENTING SEPARATE TAXATION IS ESTIMATED TO ADDITIONAL SOME $230 MILLION, HE SAID.

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BE

DEBATE ON THE BILL WAS ADJOURNED.

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