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Review on depreciation allowances completed

The Board of Inland Revenue has largely completed its review on the classification of items that fall into the existing three categories for an annual depreciation allowance.

It has concluded that, on the basis of the estimated useful life of plant and machinery, the present classification is over-generous and should be changed for some items. The result would be to reduce the annual allowance for these items.

"I am grateful for the work of the Board," the Financial Secretary, Mr Donald Tsang, said today (Wednesday).

"However, I accept that the change could affect investment in plant and machinery, in particular in the manufacturing sector."

In consequence, Mr Tsang proposed to ask the Board to examine how the rationalisation of the classification should best be implemented in order to ameliorate the impact on investment in plant and machinery.

Any changes to be introduced as a result would be subject to approval by the Legislative Council, he added.

End

No change in stamp duty on stock transfers

The Financial Secretary, Mr Donald Tsang, today (Wednesday) said he did not propose to change the stamp duty on stock transfers for the time being.

However, he said, he was prepared to review the issue next year if there were initiatives from the securities industry to reduce the brokerage cost in order to make the market even more competitive.

The Government reduced the stamp duty on stock transfers for three consecutive years from 1991 to 1993, from 0.6 per cent to 0.3 per cent for a complete transaction, where it stands at the moment.

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