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Adaptation of Laws (No. 6) Bill 1998
Response to the issues raised by Bills Committee
at the meeting held on 3 December
General
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| (a) |
The Department of Justice has advised that none of the Ordinances covered by the Bill binds the State (which includes the Hong Kong Special Administrative Region) by express provision. The adaptation of laws exercise has a limited scope of adapting the ordinances as they stand. It would be outside the scope of the exercise and hence would be inappropriate to investigate or debate the reason why, as a matter of policy, the ordinance was enacted with the binding effect it has. The adaptation exercise does not involve any change to the binding effect of ordinances, except to reflect the change in sovereignty.
| Schedule 2 - Section 1 - Amendment to the definition of "export" in section 2 of the Dutiable Commodities Ordinance
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| (b)&(c) |
The definition of "export" in section 2(1) of the Dutiable Commodities Ordinance reads as follows -
""export" means to carry or cause to be carried out of Hong Kong by land, air or water and includes the export of anything carried or sent from any country and brought into Hong Kong by land, air or water for the sole purpose of being carried to another country after transhipment into another conveyance, but does not include transit cargo."
The definition is divided into 2 parts, i.e. "to carry or cause to be carried out of Hong Kong by land, air or water" and "includes the export of anything carried or sent from any country ... for the sole purpose of being carried to another country ... but does not include transit cargo". The first part refers to all goods which are carried out of Hong Kong and hence covers a very wide range of situations. The second part of the definition merely expressly refers to a special situation, i.e. transhipment, which may be otherwise taken as outside the definition of export. The inclusion of this second part does not affect the scope of application of the first part which is general in nature.
With the present interpretation of the definition of "export", goods exported to the United Kingdom, the Mainland or even Taiwan are all covered by the first part, but not the second part, of the definition.
The references to "any country" and "another country" in the definition of "export" under the Dutiable Commodities Ordinance to cover "transhipment" is inconsistent with the definition of "transhipment cargo" in the Import and Export (Registration) Regulation (Cap. 60 sub. leg.) which refers to "a place" and "another place" respectively. We also consider that the latter two references are more preferred. Nonetheless, in view of the prevailing interpretation of the definition of "export", we agree that the references to "any country" and "another country" in the definition of "export" under the Dutiable Commodities Ordinance do not require to be adapted.
| Schedule 2 - Section 63 - Amendments to Regulations 12(1)(p) and (pa) of the Dutiable Commodities Regulations (Cap. 109 sub. leg.)
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| (d) |
The policy intent of having regulations 12(1)(p) and (pa) is to exempt from duty the fuel in the fuel tank of motor vehicles which drive past the land border from the Mainland. The fuel in the fuel tank of motor vehicles crossing the border to Hong Kong may be filled on the Mainland and hence is not duty-paid in Hong Kong. But under the Dutiable Commodities Ordinance, fuel for use in Hong Kong by motor vehicles have to be duty-paid. As such, the exemption is necessary in order to avoid a breach of the Ordinance by drivers of motor vehicles arriving from the Mainland.
Regulations 12(1)(p) and (pa) stipulate that -
"(p) fuel in the fuel tank of any vehicle, other than a goods vehicle, arriving from the People's Republic of China, for use in that vehicle;
(pa) fuel in the fuel tank of a goods vehicle arriving from the People's Republic of China, for use in that vehicle, in such volume as ...."
In the two regulations, the fuel has to be "for use in that vehicle" and that the vehicle "arrives from the People's Republic of China". Interpreting the two references together, it refers to vehicles which arrive at Hong Kong from the People's Republic of China by their own propulsion and are not propelled by other conveyance. Accordingly, the two regulations only exempt from duty the fuel in the fuel tank of vehicles driving across the border into Hong Kong. Hence the present wording of the provisions reflects the policy intent.
With the interpretation of the two regulations explained above, vehicles which arrive but are not driven from Taiwan to Hong Kong are not covered by the regulations and hence fuel in the fuel tank of such vehicles are not exempt from duty. Also, the proposed adaptation of "People's Republic of China" by "Mainland of China" will preserve the policy intent and the original meaning of the regulations.
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Schedule 2 - Section 126 - Repeal of the Resolutions of the Legislative Council made under the Dutiable Commodities Ordinance
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| (e) |
The resolution which granted duty exemption to Gurkha troops granted exemption to Gurkha troops which were employed by the United Kingdom Government to serve in Hong Kong. This employment arrangement has ceased after the transfer of sovereignty. We therefore propose to repeal the resolution.
As for the resolution which granted duty exemption to the Royal Nepalese Liaison Officer, it was granted on the basis that a reciprocal exemption was given to the British Army serving in Nepal. This reciprocity is no longer of relevance after the transfer of sovereignty. The resolution is therefore proposed to be repealed. Also, Nepal has now set up a consulate in Hong Kong and its consulate enjoys immunities and privileges as agreed to be granted by the Central People's Government.
| Schedule 4 - Section 5 - Amendment to section 8(2)(h) of the Inland Revenue Ordinance
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| (f) |
Section 8(2)(h) concerns the granting of salaries tax exemption to staff employed temporarily by the United Kingdom Government. We propose to replace the reference to "Government of the United Kingdom" by "Central People's Government" in order to be consistent with the arrangement before the transfer of sovereignty.
Section 8(2)(b) of the Inland Revenue Ordinance provides for salaries tax exemption to the official emoluments of consulate staff who are the citizens of the state represented by them. Section 8(2)(h) exempts from salaries tax the emoluments payable to persons in the temporary service of the United Kingdom Government.
| | (g) |
For the reasons explained in Parts (e) and (f) above , we do not consider that there are inconsistency between the adaptation proposal for the two resolutions under the Dutiable Commodities Ordinance and that for section 8(2)(h) of the Inland Revenue Ordinance.
| Schedule 4 - Section 10 - Definition of "operator of a Hong Kong aircraft" in section 39E(5) of the Inland Revenue Ordinance
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| (h) |
Section 39E(5) of the Inland Revenue Ordinance has a reference to a United Kingdom Order, i.e. the Air Navigation (Overseas Territories) Order 1977. We therefore have to adapt the section in order to ensure that it is consistent with Hong Kong's status as a Special Administrative Region of the People's Republic of China. For adaptation of law purposes, the reference may either be deleted or replaced by an appropriate reference. The former alternative is not recommended as in doing so the operation of the section, which concerns the claiming of allowances for leased machinery and plant by taxpayers (including aircraft operators), will be affected. As for replacing it with an appropriate reference, the United Kingdom Order was localised as the Air Navigation (Hong Kong) Order 1995 (section 11 of the Civil Aviation (Amendment) Ordinance (66 of 1997) which is now the subsidiary legislation of the Civil Aviation Ordinance (Cap. 448)). We therefore propose to replace the reference to the United Kingdom Order by the "Air Navigation (Hong Kong) Order 1995". Although the proposed amendment could have been taken up in 1995 when the United Kingdom Order was replaced by the Air Navigation (Hong Kong) Order 1995 , the amendment still falls within the scope of adaptation of laws as the proposal deals with the adaptation of an United Kingdom Order which should not be retained in Hong Kong's legislation.
| Schedule 6 - section 10 - amendments to section 38 of the Stamp Duty Ordinance
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| (i) |
Sections 38 to 47 are under Part V of the Stamp Duty Ordinance which concerns exemption and relief. Section 38 sets out the definitions of term used in the Part and sections 39 to 47 refer to the arrangement under different situations. The definition of "Government" in section 38 reads as follows -
""Government" means -
(a) the Government of Hong Kong;
(b) the Government of the United Kingdom"
Various sections in Part V require adaptation. These sections can be grouped into two groups. The first group comprises sections 39(b) and (c), 45(7), and 46(1) and (2) in which references to "Crown" appear. The second group comprises sections 41(1) and 43(2) in which references to "Government" appear. In accordance with the general adaptation principles, "Crown" will be adapted by "Government", which is already defined in the Interpretation and General Clauses Ordinance to mean the Government of the HKSAR. This "Government", which would replace "Crown", has to be distinguished from the reference to "Government" which is defined under section 38 and at present referred to in sections 41(1) and 43(2). If we simply replace "Government of United Kingdom" in the definition of "Government" in section 38 by "Central People's Government" and retain the definition, confusion will be caused. We therefore propose to delete the existing definition of "Government" in section 38 and to amend the second group of sections (i.e. section 41(1) and 43(3)) by expanding "Government" appearing in those sections to refer to the "Central People's Government and the [HKSAR] Government".
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Finance Bureau
FIN CR 1/3221/91
24 December 1998
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