XN000022-1996-03-06 — Page 48

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Legislation on source concept uncalled for

There is no need to introduce legislation to clarify the territorial source concept which underlies Hong Kong's tax system.

Such law would not even be helpful, the Financial Secretary, Mr Donald Tsang, said today (Wednesday).

Where further clarification is necessary, he believes the Government should rely on administrative measures, such as Practice Notes issued by the Commissioner of Inland Revenue.

In brief, this concept means that only those profits which originate in Hong Kong are liable to tax here.

End

Tax relief for housing-related expenditure

The Financial Secretary, Mr Donald ['sang, said today (Wednesday) the Government should continue to invest in the existing housing programmes to provide direct assistance to those genuinely in need rather than providing a concession to first- time home buyers.

Mr Tsang said during the Budget consultations, some legislators asked him to consider introducing an allowance for expenditure on mortgage interest or rental payments. Some others asked for concessions to first-time home buyers.

"I share their enthusiasm for encouraging home ownership. Indeed, the Government already does a great deal to provide decent homes for Hong Kong people." he said.

But he added that the total cost over five years of the various suggestions could be as high as $17,5 billion.