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What does
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pay 30 per cent of the corporate profits tax. this mean? The fact is that just 10 companies
ree istered is to say, 0.005 per cent of all the richest companies in Hong Kong garner over a fifth of all corporate profits. If this concern is some devious backhanded way of suggesting that the likes of Swire, Hutchison and Wharf should be broken up, it should be rejected categorically. Ironically, it is not at all clear that indirect taxes will provide the stable revenue base some in the Government crave. At least that's not Hong Kong's experience in the last recession. Nor is it apparent that draining billions of dollars out of the economy into the government's already overflowing coffers is a prudent, productive use of Hong Kong's limited resources. What is obvious, though, is that the cost of a sales tax would be enormous. Think about the administrative expense.
was
Even
if a sales tax were levied at a non-retail level, the Government would have to establish a whole new bureaucracy. In fact, if such a tax were applied to a wide range of products, including necessities, as has been suggested,
have whole, fee of new civil servants would have to be hired to assess and collect and police it.
inflation.
a
Then there is the commercial cost. Such a tax would fuel
It would devastate our tourist industry. It 26 would force manufacturers and wholesalers to spend millions
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It would exacerbate just to handle accounting for the levy. 28 our shortage of skilled labour.
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Finally, there is the social cost. Someone fatuously sugg- 31 ested that a sales tax would only be slightly regressive. 32 That is like being slightly bankrupt or only a little dead.
The Government already squeezes money, out of our Hong Kong schoolchildren by taxing their soft drinks through a levy still imposed three years after the crisis it was designed to counter has passed. A fullscale sales tax would be even
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