12
WEDNESDAY, MARCH 27, 1985
+HOWEVER I AM LESS CONFIDENT ABOUT THE GOVERNMENT BEING ABLE TO ACHIEVE SUFFICIENT REVENUE WITHOUT SUBSTANTIALLY WIDENING OUR TAX BASE, HE SAID.
IN ORDER TO INCREASE PUBLIC REVENUES SUBSTANTIALLY, MR CHEONG SAID, HE BELIEVED THE TIME HAD COME TO FACE UP TO THE HARSH REALITY THAT THE TAX BASE HAD TO BE WIDENED BY INTRODUCING A NEW TAX OR NEW TAXES.
HE SUGGESTED A TAX THAT COULD LEAD TO A BALANCED BUDGET THIS YEAR COULD BE A FLAT HALF A PER CENT LEVY ON THE VALUE OF ALL
IMPORTS, EXCLUDING FOODSTUFFS.
+SUCH A TAX WOULD BE ONLY MILDLY INFLATIONARY. IT WOULD BE EASY AND INEXPENSIVE TO COLLECT AND ADMINISTER, FOR WE ALREADY HAVE THE MECHANISM OF TRADE DECLARATIONS. IT SHOULD BEAR EQUITABLY ON ALL SECTORS OF OUR COMMUNITY.
+AND, GIVEN THE SIZE OF HONG KONG'S IMPORTS, THIS IS THE SORT OF TAX THAT IS LIKELY TO PRODUCE INCREASING YIELDS, + MR CHEONG SAID.
HOWEVER, HE WARNED THAT WE WOULD HAVE TO BE CAREFUL THAT THE YIELD FROM THIS TAX WAS NOT UNWITTINGLY PASSED ON TO THE TRADE DEVELOPMENT COUNCIL, 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.
HE SAID IF THERE WERE COMPELLING REASONS AGAINST HAVING AN IMPORT TAX, WE SHOULD AT LEAST BE CONTEMPLATING THE INTRODUCTION OF A TAX, SAY, ONE PER CENT ON SALES AT WHOLESALE LEVEL.
HE POINTED OUT THAT MANY COMMUNITIES, NOTABLY THE UNITED STATES AND PRACTICALLY ALL EEC COUNTRIES, HAD BEEN TAXING SALES OF ONE KIND OR ANOTHER FOR YEARS.
THERE WAS NO GOOD REASON WHY THE GOVERNMENT SHOULD NOT SEEK TO LEARN FROM THE EXPERIENCE OF OTHER ADMINISTRATIONS, HE SAID.
TURNING TO ECONOMIC PROSPECTS FOR 1985, MR CHEONG SAID HE DID NOT AGREE WITH THE FINANCIAL SECRETARY OVER HIS FORECAST GROWTH RATE OF 11 PER CENT IN REAL TERMS OF HONG KONG'S DOMESTIC EXPORTS.
+WITH ADVERSE EXCHANGE RATES, AND WITH PROTECTIONISM BEGINNING TO RENDER OUR BILATERAL TEXTILE AGREEMENTS SOMEWHAT INSECURE, MY EXPECTATIONS FOR THE GROWTH RATE OF DOMESTIC EXPORTS WOULD BE MUCH LOWER THAN 10 PER CENT IN REAL TERMS,+ HE SAID.
MR CHEONG THEN EXAMINED THE REPRESENTATIONAL ROLE OF GOVERNMENT'S OVERSEAS OFFICES AND THE SCOPE FOR IMPROVING THE OUTPUT OF VARIOUS MANUFACTURING INDUSTRIES.
/COMMENTING ON