WEDNESDAY, APRIL 23, 1986
5
PEOPLE SEEK STABILITY IN TAXATION
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PEOPLE IN HONG KONG ARE FED UP WITH NEW OR CHANGED TAXES AND SEEK THE STABILISATION MADE POSSIBLE AGAIN BY BALANCED BUDGETS. THE FINANCIAL SECRETARY, THE HON SIR JOHN BREMRIDGE, SAID TODAY (WEDNESDAY).
CONCLUDING THE BUDGET DEBATE IN THE LEGISLATIVE COUNCIL, SIR JOHN REFERRED TO SIGNIFICANT FACTORS THAT AFFECTED TAXATION POLICY, BEARING IN MIND THE PRIORITY OF PROMOTING TRADE AND ENCOURAGING INDUSTRIAL INVESTMENT.
FIRSTLY, HE SAID, DIRECT TAXATION HAD TO BE KEPT LOW AND THERE HAD TO BE NO UNNECESSARY FETTERING OF INITIATIVE OR HARD WORK, HOWEVER PROGRESSIVE THE FORM OF TAXATION WAS,
SECONDLY, INDIRECT TAXATION, WHILE REGRESSIVE, USUALLY
ALLOWED A DEGREE OF CHOICE, HE SAID.
+THIRDLY, AT THE END OF THE DAY THERE HAS TO BE A SUBJECTIVE BALANCE BETWEEN THE TWO BROAD FORMS OF TAXATION. 60140 ON EMPIRICAL EVIDENCE SEEMS TO SUIT HONG KONG. IT OFFERS A BALANCE BETWEEN REGRESSION AND PROGRESSION. MORE IMPORTANT, IT IS REASONABLY PRODUCTIVE OF REVENUE.+
SIR JOHN SAID THE OVERALL PURPOSE OF TAXATION WAS TO RAISE SUFFICIENT REVENUE TO BALANCE THE BUDGET AND WITHIN THE BROAD BAND OF INDIRECT TAXATION TAXES SHOULD BE RAISED MAINLY FOR REVENUE PURPOSES.
+APART FROM CROSS-HARBOUR TUNNEL, VEHICLE AND PETROL TAXES WHERE PREVENTION OF UNACCEPTABLE CONGESTION IS AN IMPORTANT ISSUE, THERE IS INDEED NO SOCIAL ENGINEERING INVOLVED, HE SAID.
SIR JOHN SAID WHILE IN THEORY INDIRECT TAXATION COULD BE ADJUSTED BY MATHEMATICAL CALCULATION PLUS SOCIAL SENSITIVITY, IT WAS NOT SO EASY IN PRACTICE TO MAKE GENERALLY ACCEPTABLE MAJOR CHANGES.
+FOR EXAMPLE, IF WE ELIMINATE TAXES ON SOFT DRINKS AND PERFUMES, WHERE DO WE FIND $278 MILLION PER ANNUM? I AM NOT ALONE IN DISLIKING THE HIGH AIR PASSENGER DEPARTURE TAX, BUT WHAT OTHER SOURCE AFFORDS $550 MILLION PER ANNUM?+ HE ASKED.
+VALUE ADDED OR SALES TAXES IN THEORY OFFER AN ALTERNATIVE APPROACH, SIR JOHN SAID, BUT HE CAUTIONED AGAINST MAJOR CHANGE WITHOUT GREAT STUDY AND CONSULTATION.
/REGARDING DIRECT