NOTHING TO BE Written IN THIS MARGIN
CONFIDENTIAL
9. And by introducing new taxes ?
One possibility would be to extend the scope of indirect taxation
to cover goods which are not at present subject to tax at all.
An obvious candidate would be 'luxury' commodities. Taking into
account the need not to overburden the tourist industry or out-
workers who supply their own equipment as well as the importance
to the community of recreational facilities at reasonably low cost, it might be possible in 1979/80 to raise about HK$340 million
at 1976 prices by means of a tax equivalent to 15% of consumers'
expenditure on a fairly narrow range of items. This, together
with the proceeds of the increases in existing taxes HK$570 million for direct taxes (question 6) and HK$320 million for indirect taxes and other charges (question 8)- would provide almost the whole of the additional HK$1260 million required for
1979/80:
1973 (HK$million) (HK million)
1974
Consumers' expenditure* :
Watches, cameras, optical goods
445
454
Sports goods, etc.
405
421
Radios, sewing machines, etc.
915
1102
1765
1977
Less 50% to allow for
'necessities**
882
988
883
989
Jewellery
553
599
1436
1588
Expenditure for 1973/74
1717x132% (= 2266
(expenditure in 1979/80 at 1976 prices)) x 15% tax
340
1973 expenditure at 1974 prices 1651
Add % to estimate 1975/76
expenditure at 1975 prices
Gross domestic product 1975/76
at 1975 prices (as/question 1) Gross domestic product 1979/80
per
at 1976 prices (as question 2) % increase in gross domestic product
* as per GDP Estimates
that is, items deemed important for tourist industry, outworkers and recreation.
x price deflator in GDP Estimates for private consumption
expenditure rises from 140 in 1973 to 161 in 1974. allowing for the recession in 1974/75.
(HK$ million)
1238
397
1635
1717)
36204
47822
32%)
(17865) Dd.145178 400m 5/73 G.W.B.Ltd. Gp.863
/Summary of Revenue Proposals
CONFIDENTIAL