3
Of course we would have to be careful that the yield from this tax is not unwittingly passed on to the TDC, and we would have to consider very carefully the implications of such a tax on our oft-pronounced status in the GATT as a free port. Before anyone shoots it down I would like to remind my colleagues that Hong Kong is something of an exception in not having an import tax and, much more importantly, that times have changed, and changed to such an extent as to justify our having to take a close look at our fiscal system.
level.
If there are compelling reasons against having an import tax, we should at least be contemplating the introduction of a tax of, say, 1% on sales at the wholesale
Such a tax would again have to exclude foodstuffs, would probably produce less than the tax on the value of imports, and would almost certainly be more costly to administer. But many communities, notably the United States and practically all EEC countries, have been taxing sales of one kind or another for years; we ourselves have recently reintroduced the tax on cinema tickets; and there is no good reason why the Government should not seek to learn from the experience of other administrations.
Economic prospects for 1985
Turning now to economic prospects for 1985, I am afraid I disagree with the Financial Secretary over his forecast growth rate of 11% in real terms for Hong Kong's domestic exports. With adverse exchange rates, and with protectionism beginning to render our bilateral textile agreements somewhat insecure, my expectation for the growth rate of domestic exports would be much lower than 10% in real terms. While the emergence of China as our second largest market is a welcome development in market diversification, it must not be forgotton that our exports to China are influenced