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Legislative amendments giving effect to the three revenue concession proposals in the 2000-01 Budget will be introduced into the Legislative Council very shortly in two separate bills -- Revenue Bill 2000 and Revenue (No.2) Bill 2000.

Revenue Bill 2000 seeks to reduce the rate of stamp duty on stock transactions by 10%. It will be gazetted today (March 14) and introduced into the Legislative Council on March 15. It will come into effect on the day of its enactment after it has been passed by the Legislative Council.

Revenue (No.2) Bill 2000 comprises legislative amendments relating to the other two budget revenue proposals - to extend the reduction in diesel duty rate from $2.89 to $2.00 per litre for another nine months until December 31, 2000, and to extend the exemption of electric vehicles from First Registration Tax for another three years until March 31, 2003.

Since the proposals aim to extend two current concessions which will both lapse on March 31, they will come into effect on April 1 under a Public Revenue Protection Order before the Bill is passed by the Legislative Council.

A Government spokesman said today that the primary purpose of reducing the rate of stamp duty by 10% is to help sustain Hong Kong's competitiveness in the global financial marketplace by lowering the costs of stock transactions.

"We are facing increasingly severe competition from other major financial markets, for investment funds and for business in stock transactions. The international trend is to reduce stamp duty and even abolish it altogether, in order to enhance the competitive edge. It is very important that the Government should take concrete steps towards reducing transaction costs by bringing down stamp duty as soon as possible.

"This will also be conducive to securing a concerted effort from the industry in this direction. We understand that the newly established Hong Kong Exchanges and Clearing Ltd is consulting its participants on a proposal to remove the current minimum brokerage commission in April 2002.

"We will introduce the Revenue Bill 2000 into the Legislative Council at the earliest possible instance on March 15, and hope that legislators will accord priority to it with a view to ensuring its early passage," the spokesman said.

As regards the other two proposals, the spokesman said that the proposed extension of the diesel duty rate aimed to avoid imposing an additional burden on the transport industry at a time of economic recovery.

"As more and more diesel taxis will switch to LPG-fuelled vehicles in the coming financial year, the transport industry also should find it much easier to reduce its dependence on diesel by next January," he said.

"The proposal to extend the exemption of FRT for electric vehicles aims to continue promoting the use and development of this environmentally friendly type of vehicles, which is in line with our objective to improve air quality," the spokesman added.

Both the Public Revenue Protection (Revenue) Order 2000 and the Revenue (No.2) Bill 2000 will be gazetted on March 24. The latter will be introduced into the Legislative Council on April 5.

End/Tuesday, March 14, 2000

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