TNAG-1641-FCO40-2288-Budget-of-Hong-Kong-1987 — Page 215

3.2.87

SECRET

65

126.

In proposing these concessions, I am aware

that there is some lack of consistency with my desire to

see taxes more broadly based. I have, however, taken into

account the present structure of direct taxes and the

relationship between direct and indirect taxes to which I

referred earlier. I believe that, in the context of the

present tax structure, what I am proposing is both

equitable and cost effective. The concessions will enable

the Commissioner to concentrate staff resources on more

revenue productive work.

127.

I propose to introduce these new concessions

with effect from the year of assessment commencing 1 April

1987. The first occasion on which they will apply,

therefore, will be to provisional and final salaries tax

assessments for the fiscal year 1987-88, and also to

1987-88 Personal Assessments.

I estimate that the cost to

the revenue in 1987-88 will be about $470 million, and for

a full year, $650 million.

SECRET