WEDNESDAY, MARCH 18, 1987
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+THESE POSITIVE FEATURES OF THE GOVERNMENT ARE WELL SUITED TO THE UNIQUE DEVELOPMENTS OF HONG KONG, AND SHOULD NOT BE PUT IN JEOPARDY BY ADOPTING A TAXATION POLICY THAT PAYS NO ATTENTION TO THE PEOPLE'S ABILITY TO PAY, DR HO SAID.
HE SAID THAT AN ILL-CONCEIVED INDIRECT TAXATION SYSTEM, COUPLED WITH WIDE GAPS IN INCOME DISTRIBUTION CURRENTLY PREVAILING IN HONG KONG, MIGHT LIKELY ACCENTUATE NEGATIVE SENTIMENTS IN THE COMMUNITY AT THESE SENSITIVE TIMES OF TRANSITION.
HE NOTED THAT THE HONG KONG GOVERNMENT HAD BEEN MAKING GENEROUS PROVISIONS IN THE LAST 10 TO 15 YEARS FOR HOUSING, EDUCATION, HEALTH AND WELFARE. THIS BENEVOLENT GOVERNMENT POLICY COULD BE READILY VERIFIED BY REFERENCE TO THE PREVIOUS ANNUAL POLICY SPEECHES AND BUDGET SPEECHES.
+ I WISH TO BE CONFIRMED THAT OUR FINANCIAL SECRETARY'S THINKING ON INDIRECT TAXATION IS NOT A HINT TO SIGNIFY A REVERSING OF THE POLICIES ADVOCATED BY OUR FORMER GOVERNORS AND FINANCIAL SECRETARIES,+ HE SAID.
HE NOTED THAT ONE OF THE REASONS ADVANCED BY THE FINANCIAL SECRETARY IN SUPPORT OF A BROADLY-BASED INDIRECT TAXATION WAS THE STABILITY OF REVENUE SOURCE.
HOWEVER, FOR THOSE COMMODITIES THAT COULD BE FORGONE WITH EASE,
NO REVENUE WOULD BE GENERATED. NON-ESSENTIAL ITEMS CAME UNDER THIS CATEGORY OF COMMODITIES. REDUCED CONSUMPTION OR DIMINISHED PURCHASING POWER ON THE PART OF THE CONSUMERS ON ACCOUNT OF POOR EMPLOYMENT OR UNDER-EMPLOYMENT WOULD LIKEWISE RESULT IN SHRUNKEN REVENUE, DR HO SAID.
+A MORE ASSURED AND LONG-TERM MEANS TO BOOST THE YIELDS TO THE PUBLIC COFFERS IS TO FURTHER IMPROVE OUR ABILITY TO EXPORT THROUGH A PACKAGE OF GOVERNMENT-SPONSORED PLANS: INFRASTRUCTURAL INVESTMENT, CREDIT FACILITATION, RESEARCH AND PRODUCTIVITY PROMOTION, TECHNOLOGICAL TRANSFER, TRAINING AND UPGRADING OF MANPOWER, MARKETING INFORMATION AND SO ON, HE ADDED.
DR HO SAID EXPERIENCE SHOWED THAT HONG KONG'S EXPORT CAPABILITIES WERE THE GENUINE LOCOMOTIVES OF THE LOCAL ECONOMY AND THE MORE RELIABLE GENERATOR OF PUBLIC REVENUE.
HE WELCOMED A LOW RATE OF DIRECT TAXATION IF IT CAME ABOUT AS A RESULT OF ECONOMIC GROWTH. HOWEVER, IF IT CAME ABOUT AS A TRADE-OFF FOR A WIDENING NET OF INDIRECT TAXATION, HE WAS AFRAID THAT THIS POLICY OPTION MUST HAVE OVERLOOKED OTHER OBJECTIVES OF GREAT SOCIAL AND ECONOMIC SIGNIFICANCE.
THE FINANCIAL SECRETARY MUST EXERCISE GREAT CARE AND UNDERTAKE THOROUGH CONSULTATION BEFORE DESIGNING A RIGHT MIX OF DIRECT AND INDIRECT TAXES TO YIELD THE REQUIRED RESOURCES TO MEET THE EXPANDING PUBLIC SECTOR EXPENDITURE AGAINST A SET OF DESIRABLE AND ACCEPTED SOCIAL AND ECONOMIC GOALS COMPATIBLE TO THE UNIQUE SITUATIONS OF HONG KONG, DR HO CONCLUDED.
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