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PRESS RELEASE

(Source : Government Information Centre)


Business Registration Certificate Levy to be increased

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The Government gazetted the Business Registration Ordinance (Amendment of Schedule 2) Order 2002 today (April 4) seeking to increase the Business Registration Certificate (BRC) levy for the Protection of Wages on Insolvency Fund from $250 to $600 per annum with effect from May 16.

A Government spokesman stressed that a levy increase of $350 was necessary to ensure that the Fund could continue to provide prompt financial relief to employees of insolvency cases.

Under the Protection of Wages on Insolvency Ordinance, ex-gratia payment could be made from the Fund to employees who had been owed wages, wages in lieu of notice or severance payment by their insolvent employers.

"Over the years, the Fund had played an important role in maintaining harmonious labour relations and social stability and it is mainly financed by a levy on the BRC issued," the spokesman said.

"Since the Asian financial crisis in late 1997, there has been an upsurge in ex-gratia payment made from the Fund. As a result, the Fund has been operating on annual deficits since then. Its reserve stood at $214.2 million as at the end of February 2002," the spokesman explained.

"The additional levy of $350 per annum or an amount of less than $1 a day per establishment will only constitute an insignificant fraction of an employer's operating costs."

"Both the Protection of Wages on Insolvency Fund Board and the Labour Advisory Board supported the levy increase," he added.

The Financial Secretary has proposed in the Budget 2002-03 to waive the business registration fee for one year. However, an operating business is still required to apply for registration, and the relevant BRC levy to the Fund would still be payable on registration of business or issue of further BRC.
The Order will be tabled at the Legislative Council on April 10, 2002.

 

End/Thursday, April 4, 2002

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