(Source : Government Information Centre)
Revenue (No. 2) Bill 2003
The Revenue (No.2) Bill 2003, which seeks to amend the Inland Revenue Ordinance (Cap. 112) to implement the revenue proposals related to salaries tax, profits tax and property tax announced in the 2003-04 Budget, will be gazetted on Friday (April 4).
The proposed revenue measures are as follows -
* to revert the marginal salaries tax rates and bands to levels before the 1998-99 concessions over two years (in 2003/04 and 2004/05 years of assessment), i.e. to increase incremental steps from 5% to 6%, and the marginal tax rates to 2%, 8%, 14% and 20%, reduce the bandwidth from $35,000 to $30,000;
* to revert the basic and married person's allowances to their levels before the 1998-99 concessions over two years, i.e. from $108,000 to $100,000 and from $216,000 to $200,000 respectively;
* to lower the single parent allowance from $108,000 to $100,000 over two years;
* to increase the standard salaries tax rate from 15% to 16% in two phases over years of assessment 2003/04 and 2004/05;
* to remove the exemption for holiday warrants and passage;
* to increase the allowance for the third to ninth child from $15,000 to $30,000, equivalent to that for the first and second child;
* to raise the ceiling for tax deductible charitable donations from 10% to 25% of assessable income;
* to increase the tax rate for corporations from 16% to 17.5% effective from 2003-04 year of assessment;
* to increase the tax rate for unincorporated businesses from 15% to 16% in two phases over years of assessment 2003/04 and 2004/05;
* to increase the rate of deeming assessable profits for certain payments, such as royalties and licence fees, from 10% to 30%;
* to raise the ceiling for tax deductible charitable donations from 10% to 25% of assessable profits; and
* to increase the property tax rate from 15% to 16% in two phases over years of assessment 2003/04 and 2004/05.
It is estimated that the proposals will raise a total of $10.37 billion ($6.8 billion for salaries tax, $3.5 billion for profits tax and $70 million for property tax) in a full year. On the other hand, taxpayers will be able to benefit from a rise in the ceiling for tax-exempted donations to approved charitable organisations. This proposal aims to encourage private donations to educational and other charitable organisations. It is estimated to cost revenue about $100 million per year.
The Bill will be introduced into the Legislative Council on April 9, 2003.
End/Wednesday, April 2, 2003