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WEDNESDAY, MARCH 19, 1975
HIGHER TAX RATE SUGGESTED
X X X X X
THE HON. LEE QUO-WEI TODAY CALLED ON THE GOVERNMENT TO CONSIDER THE PROSPECT OF INCREASING THE STANDARD RATE OF TAXATION TO FINANCE ITS DEFICIT, BUT INDIRECT TAXATION, HE STRESSED, SHOULD REMAIN SIMPLE AND NOT TOO HIGH.
ADDRESSING THE LEGISLATIVE COUNCIL IN THE BUDGET DEBATE, HE NOTED THAT THE PROPOSED EXPENDITURE FOR THE GOMING FISCAL YEAR WAS CLEARLY +MUCH MORE THAN OUR FINANCIAL RESOURCES CAN PRODUCE AND MUCH LESS THAN OUR SOCIAL PROGRESS REQUIRES.+
POINTING OUT THAT THE FORECAST FOR EXPENDITURES FOR THE THREE YEARS THEREAFTER NEEDED EVEN MORE MONEY HE SAID FURTHER CURBS IN EXPENDITURE WOULD AFFECT THE INFRASTRUCTURE, PARTICULARLY EMPLOYMENT.
TO BORROW, HE EXPLAINED, MUST NOT EXCEED A CERTAIN LIMIT AND TO FURTHER INCREASE INDIRECT TAX, FEES AND CHARGES COULD AFFECT THE COST OF PRODUCTION AND COST OF LIVING.
HOWEVER, MR. LEE CAUTIONED THAT THE AMOUNT OF ANY INCREASE IN DIRECT TAXATION + IS OF COURSE A MATTER THAT MUST DE GIVEN VERY CAREFUL AND SERIOUS CONSIDERATION TAKING ALL RELATIVE FACTORS INTO ACCOUNT.>
HE ALSO EMPHASISED THAT, ONCE AN INCREASE WAS DECIDED UPON, THE GOVERNMENT SHOULD INDICATE THAT SUCH A RATE WOULD REMAIN UNCHANGED FOR A PERIOD OF YEARS SO AS TO REMOVE ANY UNCERTAINTY OF FURTHER INCREASES AND MAINTAIN CONFIDENCE FOR THE INVESTORS.
IN ADDITION, HE SAID PERSONAL ALLOWANCES SHOULD BE APPROPRIATELY INCREASED IN ORDER TO AVOID HARDSHIP DEING INFLICTED ON THE TAXPAYERS OF LOW INGOME GROUP.
THE PRESENT LOW STANDARD RATE OF 15 PERCENT, HE SAID, WAS ONE OF HONG KONG'S MOST IMPORTANT INVESTMENT ATTRACTIONS.
IF THIS PERCENTAGE WAS COMPARED WITH THOSE OF 45 PERCENT IN INDONESIA, 40 PERCENT IN MALAYSIA, 40 PERCENT IN SINGAPORE 35 PERCENT IN THE PHILIPPINES, 30 PERCENT IN THAILAND, 27 PERCENT IN KOREA AND 25 PERGENT IN TAIWAN, THERE SEEMS TO DE SOME MARGIN TO PERMIT OUR TAX RATE TO GO UP, IF THERE IS SUCH A NEED.✦
COMMENTING ON THE ARGUMENT THAT SOME OF THESE OTHER COUNTRIES NOW OFFERED MORE ATTRACTIVE INCENTIVES FOR INVESTMENTS, HE SAID THE MANY BASIC FACILITIES THAT WERE UNIQUELY AVAILABLE IN HONG KONG SHOULD MORE THAN OFFSET THE LACK OF SUCH INCENTIVES AS EXISTED ELSEWHERE.
+1 AM SURE GOVERNMENT AS WELL AS MEMDENS OF THE PUBLIC MUST HAVE GIVEN CONSTANT THOUGHTS ON WHETHER OUR LOW STANDARD TAX RATE SHOULD BE RAISED. IF IT IS FORCED UPON US TO CHOOSE DETWEEN A DETERIORATING SOCIAL INFRASTRUCTURE WITH LOW TAX RATE AND AN IMPROVING INFRASTRUCTURE WITH SLIGHTLY HIGHER TAX RATE, 1 AM SURE THE MAJORITY WOULD PREFER THE LATTER.<
AIR. LIME