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12. AS SAND LAST MONTH, THE GOVERNMENT IS WORRIED ABOUT POSSIBLE SERIOUS EROSION OF PROFITS TAX REVENUE ARISING FROM THE REMOVAL OF INTEREST TAX. WE ARE STILL STUDYING THIS COMPLE ISSUE. IN REMOVING INTEREST TAX ON HONG KONG DOLLAR DEPOSITS WITH FINANC HAL INSTEPTUTIONS, WE ARE DOING THE MOST THAT IS POSSIBLE, PENDING THE OUTCOME OF OUR STUDY. W HOPE TO BE IN A POSITION TO PROPOSE MORE LASTING REFORMS IN THESE FIELDS OF TAXATION IN THE BUDGET NEXT FEBRUARY.
13. THESE MEASURES ARE DESIGNED TO STABILIZE THE EXCHANGE VALUE OF THE HONG KONG DOLLAR, AND THUS TO PROVIDE A CLIMATE FOR GROWING PROSPERITY WITH RESTRAINED INFLATION. THE GOVERNMENT HAS CONFIDENCE IN THE STABILISED EXCHANGE RATE. SO CAN THE PEOPLE OF HONG KONG. LET US NOW GET ON WITH OUR BUSINESS.
YOUDE
LIMITED
COPIES TO:
HD/HKD
HD/ERD(MR APPLEYARD)
MR BURROWS
PS
PS/MR LUCE
PS/PUS
MR PERRETZ
LEGAL ADVISERS
TREASURY
MR D HOLLAND BANK OF ENGLAND
MR GIFFARD
MR EVANS
MR DONALD
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