PROFITS TAX Bankers and accountants welcomed the move to exempt businesses from tax on interest earned on Hong Kong dollar deposits. Price Waterhouse tax partner Alice Chan Wing-yee said there had been calls for such an exemption for several years. She expected more businesses to repatriate funds to Hong Kong, taking advantage of yields improved by the tax exemption and higher local deposit rates. Joseph Yam Chi-kwong, chief executive of the Hong Kong Monetary Authority, said local corporations held offshore deposits of about $200 billion in either Hong Kong or US dollars. But he said about $130 billion was recycled back into Hong Kong through the interbank market. The authority said it believed a large part of these deposits were booked offshore to avoid profits tax liabilities. It estimated that introducing the measure would see the Government forgo revenue of $500 million a year. The treasurer of the Hong Kong branch of the Commonwealth Bank of Australia, Andrew Fung Hau-chung, said the move would revive the corporate appetite for local currency certificates of deposit issued by domestic banks.