TNAG-1858-FCO40-2633-Legislative-Council-of-Hong-Kong-memoranda-and-minutes-of-me-1989 — Page 165

HONG KONG LEGISLATIVE COUNCIL

19 July 1989

香港立法局 ———————一九八九年七月十九日

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It has been argued that taxpayers should be granted the option of choosing whether to be taxed separately or jointly. Whilst theoretically this may be right, I agree that to allow such an option would probably make the system administratively unmanageable. No computer can possibly handle such uncertainty. The Bill as drafted gives no general right of election, but to prevent taxpayers from becoming worse off under separate taxation, the Bill provides that if one spouse shall have an unabsorbed allowance, an election for joint assessment may be made. One small inequity however remains. The sum total of the two basic allowances falls short of the married person's allowance by $2,000. There may be cases of married couples having to pay more tax under separate taxation than they would if under joint assessment. The ad hoc group considers that this inequity should be removed. The proposed section 10 under clause 3 of the Bill will therefore be amended during the Committee stage to allow couples to make the election for joint assessment where their aggregate salaries tax under separate taxation would be greater than the amount payable by them if they had made the election for joint assessment.

The proposed section 11 under clause 3 of the Bill provides that an election for joint assessment should be made within the year of assessment or the year following. Although there is provision for granting of such further time as the commissioner may allow, the ad hoc group feels that the time limit should be expressly extended to after the assessment for the year of assessment becomes final and conclusive. Before an assessment becomes final, it may be difficult to decide whether or not an election for joint assessment would be advantageous or disadvantageous. I am pleased that appropriate amendment to this provision will be made during the Committee stage.

In relation to the proposed Part V under clause 9 of the Bill, the ad hoc group expressed concern over the use of the word "may" in relation to the granting of allowances. The word "may" seems to connote a discretion as to whether or not the allowances would be granted. The intent of the legislation is clearly that the allowance will be granted provided the relevant conditions are satisfied. For the avoidance of doubt, the ad hoc group has suggested to substitute the word "shall" for "may", to which the Administration has agreed.

Sir, the introduction of separate taxation removes the unfair tax burden which married couples have suffered for a long time. It goes a long way towards encouraging more women to join our labour force, which is most desirable at this time when our labour market is still tight.

Sir, with these remarks, I support the motion.

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