XN000022-1992-04-01 — Page 8

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WEDNESDAY, APRIL 1, 1992

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OVER HALF OF HONG KONG'S WORKING POPULATION AT PRESENT PAY NO SALARIES TAX AT ALL.

OF THOSE WHO DID PAY SALARIES TAX, OVER 90 PER CENT PAY AT LESS THAN THE STANDARD RATE.

IN HIS BUDGET, HE HAD PROPOSED TO

INCREASE SALARIES TAX

ALLOWANCES BY AN AVERAGE OF OVER 12 PER CENT.

THIS WOULD RESULT IN EIGHT PER CENT OF SALARIES TAXPAYERS PAYING NO TAX AT ALL; AND A FURTHER 83 PER CENT WOULD HAVE THEIR TAX BILLS REDUCED.

PROFITS TAX PROPOSAL NOT TREND FOR HEAVIER TAXES: FS

THE

THE PRESENT PROFITS TAX PROPOSAL SHOULD NOT BE REGARDED AS START OF A TREND OR A SLIPPERY SLOPE TOWARDS HEAVIER TAXES ON PROFITS.

THIS WAS STATED BY THE FINANCIAL SECRETARY, THE HON HAMISH MACLEOD, WHEN CONCLUDING THE BUDGET DEBATE AT THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

MR MACLEOD SAID HE WAS PLEASED THAT SO MANY MEMBERS HAD SUPPORTED A MODEST INCREASE IN PROFITS TAX.

**THERE IS A BROAD CONSENSUS THAT PROFITS AS WELL AS SALARIES SHOULD CONTRIBUTE TO THE PUBLIC REVENUE, HE SAID.

Ir

HE UNDERSTOOD THE CONCERN OF THOSE WHO FEARED THAT FURTHER INCREASES IN PROFITS TAX WOULD BLUNT THE COMPETITIVE EDGE AS A BUSINESS AND FINANCIAL CENTRE.

ON RATE PROPOSAL, MR MACLEOD SAID THE MODEST HALF-OF-ONE- PERCENTAGE POINT INCREASE STILL LEFT RATES NEAR THEIR HISTORICAL LOW.

'FURTHERMORE, RATES HAVE DECLINED AS A PROPORTION OF THE TOTAL COST OF ACCOMMODATION TO LESS THAN FOUR PER CENT.

SEVERE.

"SO THE REAL IMPACT OF THE PROPOSED INCREASE WILL NOT BE

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AND BECAUSE RATES BROADLY REFLECTED RATEPAYERS' ABILITY TO PAY, THE MIDDLE AND LOWER INCOME GROUPS WOULD BE THE LEAST AFFECTED, HE SAID.

ON SUGGESTION BY SOME MEMBERS TO EXTEND THE SCHEME INTRODUCED ON APRIL 1, 1991, HE POINTED OUT THAT WAS INTRODUCED AS A TEMPORARY MEASURE ONLY.

RATES RELIEF

THIS SCHEME

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