TNAG-1734-FCO40-2447-Minutes-and-Hansards-of-the-Legislative-Council-of-Hong-Kong-1988 — Page 231

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The proposals in the Bill are for royalty to be

payable on

on gross

income from television advertising,

according to a sliding scale, but subject to an overall

per cent ceiling of 12 of the overall income from television

advertising. Royalty would be payable on the amount that

would be expected to be due to a licensee at published

that

is,

e

Will not be

market rates for particular transactions, any special discounts given in particular instances deducted in the calculation of the royalty due.

The

new

This is

system

of

to designed calculation is not, however, intended to be a means of

prevent avoidance.

but rather to

ensure

increasing revenue,

that the

community benefits from the licensees' privileged use of a

community property.

This Bill is rather complex in parts,

particularly as regards disclosure of

of information on

shareholdings and the mechanisms for tracing the ultimate The existing control of the voting shares of a licensee, Ordinance has broad provisions which were intended to keep the ownership and control of licensees in local hands. However, as I indicated earlier, these provisions may be circumvented because the ceiling on ownership by 'non-local' shareholders stops at ownership of the shares

to the in the licensee company, and

company, and does not apply ownership of the shares in a company which in turn owns

shares in a licensee.

/This is

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