(Source : news.gov.hk)
Revenue Bill 2007 and Revenue (No. 2) Bill 2007 to be gazetted on Friday
The Revenue Bill 2007 and Revenue (No. 2) Bill 2007, which seek to effect the revenue-related proposals announced in the 2007-08 Budget, will be gazetted this Friday (April 20).
The Revenue Bill 2007 comprises two Budget proposals which came into effect from 11am on February 28, 2007, under the Public Revenue Protection (Revenue) Order 2007. They are:
(a) to reduce the duty on wine from the existing ad valorem rate of 80% to 40% and that on alcoholic beverages with an alcoholic strength not more than 30% (other than wine) from 40% to 20%.
(b) to reduce the stamp duty rate on transactions of properties valued between $1 million and $2 million from 0.75% to a fixed amount of $100.
As the Order gives provisional legal effect to these proposals for only four months, it is necessary for the Government to introduce a Bill containing the same proposals into the Legislative Council for enactment.
Other proposals relating to salaries tax and tax under personal assessment will be effected by amending the Inland Revenue Ordinance through the Revenue (No. 2) Bill 2007. The Bill, when enacted, will come into effect on the day of its publication in the Gazette.
"In response to the strong calls from the community for a more generous relief for taxpayers and taking into account the Government's healthy financial position after the recovery of our economy, a series of tax relief measures are proposed in the 2007-08 Budget to share the fruits of economic prosperity with the community," a government spokesman said.
The first proposal under the Revenue (No. 2) Bill 2007 is to revert the marginal tax bands and tax rates of salaries tax to their 2002-03 levels. Each marginal tax band will be widened from $30,000 to $35,000 and the highest two marginal tax rates will be reduced from 13% and 19% to 12% and 17%, respectively. The basic allowance and standard rate remain unchanged.
The second proposal is to increase the salaries tax child allowance from $40,000 to $50,000 for each child and introduce an additional child allowance of $50,000 in the year of assessment in which the child was born.
The third proposal is to increase the maximum amount of salaries tax deduction for self-education expenses from $40,000 to $60,000.
"These measures will reduce the tax burden of some 1.1 million taxpayers. We also hope to alleviate taxpayers' burden in supporting children's maintenance and encourage lifelong learning," the spokesman said.
The fourth proposal is to reduce the salaries tax and tax under personal assessment for 2006-07 by 50%, subject to a ceiling of $15,000. "Since the fiscal position in 2006-07 was considerably better than our original estimates, the Government proposes this one-off measure to share wealth with the community." He added that the reduction would be reflected in the taxpayer's final tax payable for 2006-07.
It is estimated that the proposal to reduce the duty on alcoholic beverages will cost the Government about $350 million a year. Reducing the stamp duty on property transaction will cost the Government about $250 million a year. Reducing 50% of salaries tax and tax under personal assessment assessed for 2006-07 will cost the Government about $8.1 billion in 2007-08. Other measures in respect of salaries tax and personal assessment will cost the Government about $4.9 billion in a full year.
The Bills will be introduced into the Legislative Council on May 2, 2007.
Ends/Thursday, April 19, 2007
Issued at HKT 15:01