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Wednesday, February 28, 1973
RECURRENT REVENUE FORECAST TO RISE AT FAST RATE
The Financial Secretary, the Hon. C.P. Haddon-Cave, predicted today
that the recurrent revenue for the next few years would increase at a
"sufficient fast rate" of 12 to 15 per cent, to finance total expenditure,
including the deficit on capital account.
Presenting his Budget to the Legislative Council, he said:
"But I could easily be wrong, so let us maintain a strong fiscal reserve
position."
Speaking on the revenue trends, he said that last year Hong
Kong was dependent on direct taxation.
"This trend has inevitably been upset this year by the substantial
increase in the yield from indirect taxation through stamp duties."
But stamp duty apart, among the various other sources of indirect
taxation, income from rates becomes less significant with the removal of
the yield from the Urban Rate.
"And the proportion of the yield from excise duties to the whole
continues to fall as a result of relieving from duty last year various
hydrocarbon oils with a bearing on industrial costs and on the cost of
living.
"I am less satisfied with trends is respect of revenue other than from taxation. The relative significance of revenue from licences and other fees is declining.
"Much greater attention will have to be paid during the next financial
year to bringing them into line with present day costs."
In the longer term, Mr. Haddon-Cave said he would like to see the balance between direct and indirect taxation, on the one hand, and all other recurrent revenue, on the other, around 65: 35.
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