TNAG-1858-FCO40-2633-Legislative-Council-of-Hong-Kong-memoranda-and-minutes-of-me-1989 — Page 157

HONG KONG LEGISLATIVE COUNCIL

香港立法局

19 July 1989

一九八九年七月十九日

44

feel that their status as an independent taxpayer should be respected and many of them object strongly to the unfair tax burden under the present system.

The second point concerns the working wife allowance. We have received a submission from the Hong Kong Federation of Trade Unions requesting the retention of the allowance on the grounds that certain two-income families, especially those in the lower income group, would be subject to a heavier tax burden. Whilst we fully sympathize with this group of taxpayers, we have fully considered and generally accepted the arguments of the Administration that as the allowance was introduced only as an interim measure, comparison of the tax burden should therefore be made with that before the allowance was introduced, and the continuation of the allowance would work against the principle of equity since two-income families would then be enjoying more tax benefits than single income families with similar levels of income. Perhaps, the answer to the problem facing the lower income group should be addressed by more generous adjustments to the basic personal allowance aiming at alleviating the tax burden on the lower income group in general.

In examining the Bill, we have been very conscious of the fact that although no system of tax can work to the advantage of every taxpayer, it should be as equitable as possible. We have therefore tried to ensure that no married couple would be worse off under the new system compared to the situation before the introduction of the working wife allowance. Suitable amendments to the Bill will be made to this effect. The Administration has really done a great deal of work and research and has been reasonable in its approach in granting relief in appropriate circumstances. They should be congratulated for having performed such a difficult task.

Finally, I wish to state that apart from certain transitional provisions, the new system of separate assessment will apply to final Salaries Tax Assessment for the year of assessment 1989-90, that is, to salaries earned for the year commencing 1 April 1989. I understand that relevant practice notes will be issued by the Commissioner of Inland Revenue as soon as possible.

Sir, with these remarks, I support the Bill.

MRS. FAN: Sir, the debate on whether married women should have their salaries assessed separately from their spouses has gone on in this Council for a decade. Numerous Councillors have called for separate taxation so that the privacy and independence of the married women's income can be preserved, and