PRESS RELEASE

(Source : Government Information Centre)

Revenue (Allowances for Tax) Bill 2005 to be gazetted on Friday

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The Revenue (Allowances for Tax) Bill 2005, which seeks to implement some of the tax relief measures announced in the 2005-06 Budget, will be gazetted this Friday (April 22).

Under the Bill, the Inland Revenue Ordinance (Cap 112) will be amended to effect two proposals relating to allowances under salaries tax and personal assessment.

The first proposal, to increase the child allowance from $30,000 to $40,000, seeks to alleviate the rather heavy burden of taxpayers in raising children. Around 300,000 taxpayers will benefit from this proposal.

The second proposal is to introduce a new basic allowance and an additional allowance for taxpayers maintaining parents/grandparents aged between 55 and 59.

"Because of economic restructuring and the fact that the unemployment rate for older workers is still relatively high, the younger generation will inevitably have to undertake a heavier responsibility in caring for their parents. This responsibility will be less in respect of those parents who are under 60, as they have a better chance of finding a full-time or part-time job. As a relief measure, we propose to introduce two new allowances for taxpayers taking care of dependent parents or grandparents aged between 55 and 59. They will be granted a basic allowance of $15,000 a year, with an additional allowance of the same amount if their parents or grandparents are residing with them. It is estimated that around 100,000 taxpayers will benefit from this measure," a Government spokesman said.

It is estimated that the proposal to increase the child allowance will cost the Government $620 million in tax revenue in a full year. The proposal to introduce a new basic and additional allowance for taxpayers maintaining parents/grandparents aged between 55 and 59 is estimated to cost $450 million in a full year.

The Bill will be introduced into the Legislative Council on April 27, 2005.

Ends/Tuesday, April 19, 2005

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