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Press Release
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Revenue Bill 2007 and Revenue (No. 2) Bill 2007
to be gazetted on Friday
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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
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