XN000022-1993-02-03 — Page 17

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WEDNESDAY, FEBRUARY 3, 1993

THE GOVERNMENT, HE

SAID, HAD UNDERTAKEN TWO YEARS AGO TO INTRODUCE LEGISLATION TO LICENSE BEDSPACE APARTMENTS WITH A VIEW TO REGULATING THEIR FIRE AND STRUCTURAL SAFETY.

AS THE NEW SAFETY STANDARDS MAY RESULT IN LOWERING THE OCCUPANCY RATE OF SOME BEDSPACE APARTMENTS, THE GOVERNMENT HAD AGREED THAT NO LODGERS WOULD BE RENDERED HOMELESS DUE TO LICENSING.

HOWEVER, MR LAM SAID THERE WAS NO PROMISE TO REHOUSE ALL LODGERS, WHO NUMBERED ABOUT 4,100 AT PRESENT.

ON SINGLETON HOSTELS, MR LAM SAID THE CITY AND NEW TERRITORIES ADMINISTRATION HAD BEEN BUILDING UP A STOCK WITH A COMBINED FOR ABOUT 160 PEOPLE IN THE PAST TWO YEARS.

HE

SAID THE PRESENT CAPACITY WAS ABLE TO MEET ALL THE DEMAND AND THAT THERE WERE NO BEDSPACE APARTMENT LODGERS WAITING LIST FOR THESE HOSTELS.

CAPACITY

CURRENT

ON THE

DESPITE THIS, HE ASSURED THAT THE ADMINISTRATION WOULD CONTINUE TO ACQUIRE SUITABLE FLATS AS SINGLETON HOSTELS TO MEET DEMAND.

PROFITS TAX ON HK DOLLAR DEPOSIT INTEREST REMAINED

* * *

THE GOVERNMENT HAS NO INTENTION OF ELIMINATING PROFITS TAX CURRENTLY PAYABLE BY HONG KONG COMPANIES ON HONG KONG DOLLAR DEPOSIT INTEREST.

THIS WAS STATED TODAY (WEDNESDAY) BY THE SECRETARY FOR THE TREASURY, MR KY YEUNG, IN A WRITTEN REPLY TO A QUESTION BY THE HON LI KWOK-PO IN THE LEGISLATIVE COUNCIL.

MR YEUNG SAID HONG KONG DOLLAR DEPOSIT INTEREST RECEIVED BY COMPANIES CARRYING ON A TRADE, PROFESSION OR BUSINESS IN HONG KONG, WAS CHARGEABLE TO PROFITS TAX BECAUSE IT WAS DERIVED FROM HONG KONG.

HE SAID: "IT IS A FUNDAMENTAL PRINCIPLE OF OUR TAXATION SYSTEM THAT INCOME WHICH HAS A SOURCE IN HONG KONG IS TAXABLE, AND THAT EXEMPTIONS ARE ONLY PROVIDED IN EXCEPTIONAL CASES, WHERE THERE ARE OVER-RIDING POLICY CONSIDERATIONS.

"THIS APPROACH ALLOWS US TO COLLECT TAX EFFICIENTLY AND AT A RELATIVELY LOW COST WHEN COMPARED TO OTHER TAX JURISDICTIONS."

HE ADDED THAT TO EXEMPT PROFITS TAX ON THIS INTEREST WOULD NOT ONLY BREACH THIS IMPORTANT POLICY PRINCIPLE BUT WOULD ALSO HAVE SIGNIFICANT REVENUE IMPLICATIONS.

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