TNAG-1641-FCO40-2288-Budget-of-Hong-Kong-1987 — Page 60

125.

I believe that Members, and the public at large, will

welcome these concessions. They will also save the Inland

Revenue Department the considerable task of processing a large

number of tax returns for a relatively low yield, and will

exclude from the tax net some 100 000 persons who would

otherwise have become liable

Examples of the effects of

categories of taxpayers are

printed version of this speech (51).

126.

to salaries tax next year (50).

these concessions

set out in an

upon various

appendix

to

the

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

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.

(50) Excluding the cut in the standard rate which benefits some 43 000 standard-rate taxpayers, if the proposed concessions are brought into law, no less than a total of 710 000 persons (or 94% of the estimated salaries tax-paying population) will benefit in 1987-88, i.e. :

-

135 500 taxpayers previously liable to salaries tax will now be exempt;

100 000 persons who would have become liable to salaries tax will be kept out of the tax net; and

474 500 taxpayers will benefit by

benefit by way of reduced tax liability.

Furthermore, some 52 000 persons who elect to be assessed under Personal Assessment will also benefit through reduced liability in 1988-89.

(51) Appendix E.

39

/127. I

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