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OMELCO taxation panel pressed the matter repeatedly in
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the months the Government's Budget proposals were being
framed. But they were stonewalled. The idea did not
fit in with bureaucratic views of what Hong Kong is like.
6. But is is no longer possible to make simplistic assumptions
about the family as an economic unit. Trying to impose a single standard in the name of equity merely creates new inequities. The present system penalises married women.
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22222
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It discourages them from going out to work at a time when we need to keep married women in the work force. It falls particularly hard on the middle class, the very people we want to stay in Hong Kong.
The estimated cost of the proposed extra tax allowance for working wives is HK$340 million. That is just about what separate taxation would cost. Indeed, if separate taxation encouraged more spouses to enter the work force, tax revenue might actually rise. Likewise, Hong Kong needs more than halfway measures to promote home ownership. Almost everyone agrees that Hong Kong should encourage people to buy their own home. Home owners are hardworking permanent citizens. That is why the Budget proposed trimming stamp duty for property sales under HK$1.5 million. But is there not a better, more efficient way to accomplish this goal? While reducing stamp duty may
27 encourage speculation, making mortgage interest tax-
deductible for home owners can have only a positive impact on our economy. The cost to Government revenue would be negligible. The proposed stamp duty reduction amounts to 31* HK$300 million, while a mortgage interest deduction would
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would only be HK$760 million.
On the expenditure side there is a need to be more realistic about what Government can do. At a time when trained manpower is scarce and expenditure must be closely
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