9
ON
WEDNESDAY, FEBRUARY 26, 1906
TOBACCO DUTY RISE PROPOSED
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THE 1986-87 BUDGET INCLUDES PROPOSED INCREASES IN DUTY ON TWO TYPES OF TOBACCO, SIR JOHN BREMRIDGE, TOLD THE LEGISLATIVE COUNCIL TODAY.
SIR JOHN SAID THE DUTY ON BOTH IMPORTED RAW TOBACCO AND MANUFACTURED TOBACCO (OTHER VARIETIES) WOULD RISE FROM $170 A KILOGRAM TO $190. THE DUTY RATE OF $210 A KILOGRAM ON IMPORTED MANUFACTURED CIGARETTES WOULD REMAIN UNCHANGED.
SIR JOHN SAID THAT AS THE NEW DIFFERENTIAL WOULD BE AS LOW AS 10.5 PER CENT, IT COULD NOT BE CONSTRUED AS PROVIDING AN IMPROPER PROTECTION TO LOCAL MANUFACTURERS.
EXPLAINING THE CHANGES, SIR JOHN SAID THAT DUTY ON IMPORTED TOBACCO HAD BEEN INCREASED IN THE 1985 BUDGET, REDUCING THE DIFFERENTIAL BETWEEN UNMANUFACTURED RAW TOBACCO AND IMPORTED MANUFACTURED CIGARETTES. AT THE TIME, HE HAD WARNED THE TRADE THAT HE WOULD REVIEW THE MERITS OF IMPOSING A PURE AD VALOREM DUTY ON TOBACCO.
+THE TOBACCO TRADE HAS BEEN CONSULTED, THEIR RESPONSE HAS BEEN DIVIDED, TO PUT IT MILDLY. SOME OPPOSE THE IMPOSITION OF AN AD VALOREM BASED DUTY, WHILE OTHERS AND HAVE NOTED THIS WITH GREAT INTEREST - SUPPORT ITS INTRODUCTION ON THE GROUNDS THAT THOSE WHO CAN AFFORD TO PAY MORE BY BUYING MORE EXPENSIVE TOBACCO PRODUCTS SHOULD DO SO, SIR JOHN SAID.
HE SAID FINANCE BRANCH AND THE TOBACCO INDUSTRY HAD HELD A NUMBER INTENSIVE AND CONSTRUCTIVE DISCUSSIONS DURING 1985. OF COMPANIES HAD EXPENDED CONSIDERABLE RESOURCES TO MAKE VERY COMPLETE PROPOSALS.
+ IT HAS NEVERTHELESS BECOME PLAIN THAT THE TOBACCO TRADE DOES NOT, INDEED CANNOT, SPEAK WITH UNANIMITY ON THE MERITS OR OTHERWISE OF IMPOSING AN AD VALOREM DUTY - OR INDEED ON ANYTHING EXCEPT THE VIRTUES OF LOW TAX,+ SIR JOHN SAID.
SIR JOHN SAID THAT DESPITE THE LOWERING OF THE DUTY DIFFERENTIAL TO AN ALL TIME LOW, UNITED STATES COMPANIES HAD CONTINUED TO MAKE ALLEGATIONS OF HONG KONG PROTECTIONISM.
+1 DO NOT ACCEPT THAT THESE ALLEGATIONS HAVE REAL SUBSTANCE BECAUSE THE DUTY DIFFERENTIALS THAT EXIST REFLECT ESTABLISHED INTERNATIONAL PRACTICE WHEREBY RAW MATERIALS ARE NORMALLY TAXED AT A LOWER RATE THAN THE RELATED MANUFACTURED PRODUCT,
+ MUST NOT, HOWEVER, PROVIDE ANY EXCUSE FOR A REPETITION OF THESE UNFAIR ALLEGATIONS IN 1986 WHEN TRADE NEGOTIATIONS WILL HAVE SUCH A HIGH PROFILE,+ SIR JOHN SAID.
/HE SAID