TNAG-0569-FCO40-702-Planning-paper-on-Hong-Kong-1976 — Page 30

(17865) Dd.145178 400m 5/73 G.W.B.Ltd. Gp.863

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CONFIDENTIAL

Summary of Revenue Proposals

1979/80

Increased yield of Earnings and Profits Tax

(standard rate increased from 15% to 18%, question 6)

Increased yield of Excise Duties, General Rates and

Internal Revenue (rates increased by 12% (not 121 percentage points), question 8)

(HK million at 1976 prices)

574

319

Yield of new tax on 'luxuries' at 15% (question 9)

340

1233

1260

Revenue sought (question 6)

粥 Thus an ad valorem stamp duty of (say) 2% on a HK$100 con-

tract note would yield HK$2.00. A 12% increase in the

duty produces a revised yield of HK 2.25. The revised rate of duty is 2% +121% of 2%, that is 21% (not 141%), an increase of a quarter of a percentage point only.

CONFIDENTIAL

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