XN000022-1990-03-07 — Page 32

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WEDNESDAY, MARCH 7, 1990

"SOME ALSO DOUBTED WHETHER IT WOULD OBJECTIVE OF PROVIDING A MORE STABLE SOURCE GENEROUSLY PUT FORWARD SUGGESTIONS AS TO MEASURES THAT WE MIGHT ADOPT," SIR PIERS SAID.

ACHIEVE THE DESIRED OF TAX REVENUE. AND OTHER REVENUE RAISING

THE FINANCIAL SECRETARY SAID ALTHOUGH HE WAS FACED WITH SOMETHING LESS THAN TOTAL ENTHUSIASM FOR A WHOLESALE TAX, THERE WAS NEVERTHELESS A RECOGNITION OF THE NEED FOR A MORE STABLE TAX BASE, ONE LESS VULNERABLE TO THE VICISSITUDES OF ECONOMIC PERFORMANCE.

"INDEED, AN ENCOURAGING NUMBER OF MEMBERS OF THIS COUNCIL WHO SPOKE IN THE DEBATES ON THE LAST TWO BUDGETS ALSO RECOGNISED THE PROBLEM. I ATTACH A GREAT DEAL OF IMPORTANCE TO THESE REACTIONS,' SIR PIERS SAID.

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HE SAID PART OF THE PURPOSE OF HIS RAISING FOR DEBATE THE WHOLE MATTER OF A SALES OR WHOLESALE TAX WAS TO ENCOURAGE DISCUSSION OF THE FUNDAMENTAL PROBLEM, THAT WAS THE VULNERABILITY OF OUR TAX SYSTEM AS PRESENTLY STRUCTURED.

"THAT THE DISCUSSION HAS TAKEN PLACE LARGELY WITHOUT POLITICAL 'STURM UND DRANG' HAS BEEN HELPFUL. WHAT HAS BEEN SAID HAS INFLUENCED ME IN PUTTING TOGETHER MY BUDGET PROPOSALS THIS YEAR, THE FINANCIAL SECRETARY SAID.

ON VENTURE CAPITAL, THE FINANCIAL SECRETARY SAID THAT HE HAD EXAMINED IN SOME DETAIL THE PROPOSAL ON WHETHER A TAX CONCESSION SHOULD BE GRANTED TO VENTURE CAPITAL INVESTMENTS IN HONG KONG AND HAD COME ΤΟ THE CONCLUSION THAT THE COMPLEXITY OF THE NECESSARY LEGISLATION MADE THE PROPOSAL UNSUITABLE FOR IMPLEMENTATION KONG AT THIS TIME.

IN HONG

HE NOTED THAT THERE HAD BEEN SOME UNCERTAINTY AS то WHETHER PROFITS ARISING FROM VENTURE CAPITAL DISINVESTMENT WERE LIABLE TO PROFITS TAX, AND IT WAS SUGGESTED THAT THIS UNCERTAINTY WAS THE DEVELOPMENT OF SUCH FINANCING METHODS.

"I AM CONSCIOUS ALSO THAT THE BENEFITS ACCRUING TO THE ARE UNLIKELY TO BE SIGNIFICANT, HE SAID.

IT

HINDERING

ECONOMY

ON STAMP DUTY, THE FINANCIAL SECRETARY SAID FOR FISCAL REASONS DID NOT THINK THAT, AT THE PRESENT TIME, THE GOVERNMENT WAS IN A POSITION TO GIVE ANY CONCESSION ON THE DUTY ITSELF.

HE

AND

SIR PIERS SAID THAT, RECENTLY, IT HAD BEEN SUGGESTED TO HIM THAT CONCESSION ON STAMP DUTY ON SHARE TRANSFERS WOULD BE WELCOME THAT IT WOULD BE SELF-FINANCING THROUGH INCREASED TURNOVER,

A

THE

IT WAS ALSO SUGGESTED THAT THE GOVERNMENT SHOULD EASE ADMINISTRATIVE COST INVOLVED IN THE COLLECTION OF STAMP DUTY BY CHANGING THE SYSTEM OF LEVY SO THAT THE DUTY BECAME PAYABLE BY ONE PARTY ONLY, NAMELY THE VENDOR.

/SIR PIERS