Tax Concessions
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| Charitable Donations |
96. To encourage private donations to educational and other charitable organisations, I propose to raise the existing ceiling for tax-exempted donations to approved charitable organisations from 10% of assessable income or profits to 25%. This proposal will cost the Government about $100 million in a full year.
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Fund Management
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97. To reinforce the status of Hong Kong as an international financial centre and to remove the concerns of offshore fund managers, we will amend the Inland Revenue Ordinance to exempt offshore funds from profits tax. This will bring Hong Kong in line with major financial markets such as New York and London.
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98. At present, subscriptions to and redemptions of units in Hong Kong from unit trust funds domiciled outside Hong Kong are exempted from the fixed stamp duty of $5. However, this concession is not applicable to unit trust funds domiciled in Hong Kong. I propose to extend the exemption to them as well.
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| 99. These measures will have minimal impact on government revenue.
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Debt Instruments
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100. At present, only trading profits from qualified debt instruments with a maturity period of five years or more are eligible for a 50% concession on profits tax. To promote development of the bond market, I propose to reduce the eligible maturity period from five to three years, and grant a 100% concession on profits tax for qualified debt instruments with a maturity period of seven years or more. This proposal will cost the Government $17 million a year.
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Duty on Ultra Low Sulphur Diesel
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101. In view of the present economic situation and the operating difficulties of the transport industry, I have decided to extend the duty concession for ultra low sulphur diesel for another year to the end of March 2004, maintaining the duty rate at $1.11 per litre. This proposal will cost $1 billion.
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Rates
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102. The recent revaluation exercise indicates that, as a consequence of drops in market rent, rateable values of premises have fallen by an average of 8%. With the new rateable values coming into effect on 1 April, the majority of rate-payers will have their burden reduced.
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