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Strategies & Market Trends : HONG KONG -- Ignore unavailable to you. Want to Upgrade?

To: Tom who wrote (2642)	1/8/1999 4:12:00 PM
From: WONG	Read Replies (1) \| Respond to of 2951

Are we really having the biggest bull run in history? If then, HK is really under performing now....hmmm....maybe there's still time to play catch up?

To: Tom who wrote (2642)	1/9/1999 1:18:00 AM
From: Ron Bower	Respond to of 2951

Tom, I didn't get it totally right, but came reasonably close. Ron Beijing move may hurt enterprises in zones CHRISTINE CHAN Foreign-invested enterprises based in about 50 development zones may be indirectly affected by Beijing's latest tax ruling, Hong Kong-based accountants said. Finance Minister Xiang Huaicheng said on Wednesday Beijing would stop tax refunds from the central government to local zones. The refunds on value-added tax (VAT) and consumption tax were introduced in 1994 to allow local authorities to retain tax revenue that more or less reflected the amount they were entitled to before the tax change. The refunds were in addition to the 25 per cent of VAT the local authorities retained. The central government takes the other 75 per cent. The ruling - applying to about 50 development zones - took effect from January 1. KPMG principal Peter Kung said the aim of Beijing's latest ruling was to increase state coffers as the mainland needed funds for its reform programmes and expanding economy. Mr Kung said local authorities might need to make up for the shortfall by tightening up local tax collection. Collection of business tax and individual income tax could be more effectively enforced, he said. In that sense, both domestic and foreign-invested enterprises may be indirectly affected, although Beijing's new tax policy did not apply to them. Mr Kung said enterprises in the zones might also feel the pinch from the gradual phase-out of tax relief or preferential tax treatment that local authorities had been providing. A lighter war chest would also mean local authorities might not be able to give rebates. Mr Kung said the ruling would effectively mean a heavier tax burden on enterprises. In some development zones like Waigaoqiao Free Trade Zone in Shanghai's Pudong district, local authorities have been granting VAT rebates for goods manufactured and sold at home. Ernst & Young China partner Alfred Shum said the move would create a level playing field. Meanwhile, Tianjin Economic-Technological Development Area - the country's most profitable development zone - would not say how the new ruling would affect it and its enterprises. One official said it would remain efficient and competitive as before.