HONG KONG LEGISLATIVE COUNCIL
香港立法局
19 July 1989
一九八九年七月十九日
43
Question on Second Reading proposed.
MR. PETER POON: Sir, I welcome the Inland Revenue (Amendment) (No. 3) Bill 1989. Our existing salaries tax system treats a married woman's income as that belonging to her husband for the purpose of calculating tax liability. This antiquated system is based on a principle that dates back to the earliest days of income tax in 1805 in the United Kingdom and it produces results which are no longer acceptable today: there has been considerable public pressure in the past few years for a change to the system. The source of complaint about the system is two-fold. First, married couples both earning salaries have to shoulder a heavier tax burden than two single taxpayers earning the same level of aggregate income. Such additional burden totals hundreds of million of dollars a year and has been referred to grudgingly by some as the "marriage tax" for many years. Secondly, it is considered that the system does not give proper recognition to the privacy and independence in the tax affairs of married women.
The Administration had been under considerable pressure both from the public and from OMELCO in the last few years for introducing a new system which would allow income of married couples to be charged to tax separately. The Financial Secretary, in his speech concluding the 1988-89 Budget speech, finally agreed to introduce separate taxation for working wives as soon as practicable. As an interim measure to enable technical procedures to be worked out, he introduced the working wife allowance. The present Bill gives effect to the Financial Secretary's undertaking.
The Legislative Council ad hoc group set up to study the Bill received six representations which contained many helpful suggestions. We had several meetings with the Administration. A number of issues have been raised for discussion and have been amicably resolved. Consequently, we have agreed to a number of Committee stage amendments which, in our view, are improvements to the Bill. Despite the complexity of the matter, the Bill is generally considered to be well drafted.
I would now like to speak briefly on two points which have been raised during the deliberations of the ad hoc group. I am sure other speakers will refer to them in greater detail.
The first concerns the criticism regarding the unnecessary complication of our tax system. OMELCO have considered the issue at great length for some years and decided that such complexity is unavoidable to address the changing circumstances of our society, especially when more and more working women
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