THE one per cent cut in corporate profits tax was one of the biggest surprises in the Budget, companies and investors said.
Salomon Brothers vice-president David Williamson described the cut as ''very positive''.
But analysts did not expect it to have a significant impact on domestic corporate earnings.
Sir Hamish said although the corporate tax regime in Hong Kong was already low, a favourable tax environment was a key attraction for setting up and doing business in Hong Kong.
''Nevertheless, I believe it would be right to take advantage of our healthy financial position to reduce corporate profits tax rate to 16.5 per cent from the present level of 17.5 per cent,'' he said.
He told Legco members this would cost the Government $1.6 billion in 1994-1995 and more than $10 billion up to the 1997-1998 financial period.
Sir Hamish said: ''My proposed concession will, of course, enhance our competitiveness as a regional business centre.
