PRESS RELEASE

Legislative Council Passes Revenue Bill 2006

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The Legislative Council passed the Revenue Bill 2006 today (May 24). The Bill seeks to implement two tax relief measures announced in the 2006-07 Budget.

The first measure is to lower the marginal rates of the second, third and top tax bands by one percentage point from the existing levels of 8, 14 and 20% to 7, 13 and 19% respectively. The standard rate will remain unchanged.

The second measure is to extend the limit for deduction for home loan interest from seven years to 10 years, subject to the maximum annual deduction of $100,000.

The concession in relation to reduction of the marginal tax rates will take effect from the year of assessment 2006-07 and is estimated to cost government revenue of $1.5 billion in a full year. The concession on extending the home loan interest limit will take effect from the year of assessment 2005-06 and is estimated to cost the Government $1.2 billion in 2006-07.

Ends/Wednesday, May 24, 2006
Issued at HKT 16:33

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