TNAG-0761-FCO40-965-Budget-of-Hong-Kong--1978-1979-1978 — Page 96

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Way

16. When Commonwealth Preference Tax on new motor

vehicles was abolished in December 1975, we put all

private cars on to First Registration Tax at a flat

rate of 30%. Not for transport policy reasons, I think

there is a good case for differentiating "standard" from

"luxury" cars by hitting the latter much harder. The

present system is far too regressive and a token attack

on the "rich" might be no bad political thing.

17. Finally, and this is my only really important proposal,

I am afraid it is time we grasped the nettle and abolished

stamp duties on all documents other than those concerned

with transactions in shares and marketable securities and

assignments of fixed property, at a cost to the revenue of

$120 million. The Stamp Ordinance is a relic of another

commercial day and age and, even if reform could fit it

to modern commercial practices, I doubt whether we should

try. The Ordinance is rapidly becoming unenforceable,

particularly in the foreign exchange field, and is causing

much irritation. Elsewhere (eg the UK) duties on many

documents have long since been abolished. Of the revenue

loss of $120 million (= 23% of the estimate of revenue

from stamp duties in 1978-79) rather more than half would

be saved by the financial community as such. So I

propose (without much logic) that this should be clawed

back by another % on Corporation Profits Tax. The

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/ Commissioner