1981 — Page 115

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HONG KONG URBAN COUNCIL

glaringly apparent, everywhere: they include soil erosion, desertification, loss of cropland, pollution, deforestation, ecosystem degradation and destruction.

For this reason, and for the future health of Hong Kong's own people and environment, I'm urging that we all take a fresh look at the need for global strategies for development and for global conservation of nature and natural

resources.

We have an extremely good record here, considering the pressures of population. And I am proud to say that the Urban Council has played a very active role in this respect. But we have a lot more potential than we are using.

Unless there are some major changes in present destructive trends, future generations will look back on communities in most parts of the world as knowingly destructive and greedy, to the detriment of all who follow us, and the entire planet's health.

I think Hong Kong, in its own way, with the cooperative efforts of aware people here, may be able to make a positive impact now to change the trends. We can make a contribution out of proportion to our population and the size of our territory.

Mr. Chairman, with these remarks, I support the motion.

MR. FRANCIS CHAINE (in English):---Mr. Chairman, this is my first experience in attending an Annual General Meeting in which the freedom of speech is not confined to matter within the jurisdiction of the Urban Council. I take this opportunity to speak on the topic on 'Joint Assessment of Incomes of Husband and Wife', which in my view should have been abolished.

According to Section 10 of the Inland Revenue Ordinance which states: 'The income of a wife not being a wife living apart from her husband shall, for the purposes of this Part (i.e. Part III Salaries Tax) be deemed to be the income of the husband and shall be chargeable accordingly in his name.' In Part IV Profits Tax, Section 15B provides: 'For the purposes of this Part a wife not being a wife living apart from her husband shall be deemed to be one and the same person as her husband."

By virtue of these two sections, the incomes of husband and wife whether in the form of salary or in the form of profit is assessed jointly and not separately. The underlying reason for such joint assessment is based on the legal fiction that husband and wife is one person and therefore should be assessed jointly. However the U.K. legislature recognized the needs for separate assessment of incomes of husband and wife by introducing as early as in 1920 a wife's earned income allowance, originally quite small in amount, but from 1948 onwards fully equivalent to the tax allowances of a single person. Then in 1971 the U.K. took a further step in the same direction by introducing an option under which a married woman's earnings (whether in employment or from an independent

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trade or profession) can be taxed quite separately from the rest of the couple's joint income though at some sacrifice of the personal allowance. In 1970 separate assessment was formally introduced in U.K. by the Income and Corporation Taxes Act 1970, which received the Royal Assent on 12 March 1970, under that Act a wife must claim separate assessment in accordance with Section 38 thereof.

In Hong Kong because of high cost of living married couple normally seeks employment instead of following the old tradition where the husband goes out to work and the wife remains as a housewife. According to the statistics of salaries tax assessments for the year 1979-80 over 35% of the taxpayers are married couples paying over 30% of the total Salaries Tax.

The present scale of revenue on Salaries Tax are as follows:-

(a) Upon the first $10,000

5 per cent

(c)

(b) Upon the next $10,000

do

10 per cent

15 per cent

do

20 per cent

25 per cent

(d)

(e) Upon the remainder

From the above scale it is obvious that when the incomes of husband and wife are assessed jointly they attract a very high percentage of tax on the sliding scale and therefore it is very unfair and cause injustice. As in U.K. this joint assessment had been done away since 1970, there is no reason why in Hong Kong the Tax Law should not follow suit.

It is true the Government always argues that because of tax rate in Hong Kong is comparatively low and therefore separate assessment should not be introduced. But it is common knowledge that year in and year out the Government always has a surplus budget whilst in the U.K. on many occasions its budget is in the red. It is therefore obvious such an argument that in Hong Kong the incomes of husband and wife ought not be assessed separately does not hold water at all.

According to the Government statistics of salaries tax assessments for the year 1979-80 by family status, a copy of which is enclosed herewith; it is manifestly clear that 51.87% of the final tax is levied on 19 593 taxpayers (i.e. married couples) that represents 5.83% of the total taxpayers; the average tax per taxpayer in such bracket is $33,805. In other words, 5.83% of the total taxpayers paid over half of the total salary tax, so even if Government agrees to

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