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WEDNESDAY, MARCH 18, 1987
+A SUCCESSFUL REVIEW AT THIS TIME LEADING TO THE FORMULATION OF A LONG-TERM TAX STRATEGY WOULD CERTAINLY BE HELPFUL IN CONSOLIDATING PUBLIC CONFIDENCE, HE SAID.
MR LEE ALSO CALLED ON THE GOVERNMENT TO PROVIDE MORE INCENTIVES FOR INDUSTRIAL DEVELOPMENT THROUGH FISCAL MEANS.
FOR EXAMPLE, THE GOVERNMENT COULD INCREASE THE DEPRECIATION RATES OF PLANTS AND MACHINERY AND ALSO CONSIDER GRANTING TAX CONCESSION TO ENTERPRISES INVESTING IN HIGH-TECHNOLOGY AND CAPITAL INTENSIVE INDUSTRIES. THIS MIGHT HELP TO ATTRACT OVERSEAS INVESTMENT IN HONG KONG, HE SAID.
AGREEING THAT A HIGHER RATIO OF INDIRECT TAX TO THE TOTAL TAX YIELD WAS DESIRABLE, MR LEE SAID THE PRESENT RATIO OF ABOUT 40 PER CENT WAS STILL UNSATISFACTORY.
HE ALSO SAID THAT THE EXISTING METHOD OF TAXATION WAS NEITHER FAIR NOR OBJECTIVE.
HE SUGGESTED THAT A SURVEY ON PUBLIC CONSUMPTION PATTERNS BE CARRIED OUT TO DETERMINE WHICH ITEMS WERE INDISPENSABLE AND WHICH WERE CONSIDERED AS LUXURIES. BASED ON THE SURVEY, DUTIES ON LUXURY ITEMS COULD THEN BE IMPOSED OR INCREASED RESPECTIVELY.
+THE DUTY ON BEVERAGES SHOULD BE SCRAPPED AND THE LOSS OF REVENUE FROM IT COULD BE MADE UP BY IMPOSING DUTIES ON LUXURY ITEMS OR BY INCREASING BETTING DUTIES.
+THE GOVERNMENT SHOULD ALSO REDUCE THE AIR PASSENGER DEPARTURE TAX, AND INSTEAD INCREASE THE HOTEL ACCOMMODATION TAX TO COVER THE LOSS OF REVENUE, HE SAID.
AS FOR DIRECT TAXES, MR LEE PROPOSED TO SPLIT THE TOTAL ALLOWANCES OF $12 000 FOR THE THIRD TO NINTH CHILDREN BETWEEN THE FIRST AND SECOND CHILDREN. IT MEANT AN ADDITIONAL ALLOWANCE OF $6 000 FOR EACH OF THE TWO, BENEFITTING MOST FAMILIES.
ON SEPARATE TAXATION FOR MARRIED COUPLES, HE CRITICISED THE BUDGET FOR BEING INDIFFERENT TO PUBLIC OPINION BY FIRMLY REJECTING THE PROPOSAL.
TAX SHOULD BE LEVIED ACCORDING TO INCOME RATHER THAN MARITAL STATUS, HE SAID.
+IN VIEW OF THE LARGE NUMBER OF PEOPLE FALLING INTO THE CATEGORY OF THE 'SANDWICHED CLASS', SOCIAL STABILITY WILL BE MUCH AFFECTED IF THEY ARE OVER-AGGRIEVED,+ HE WARNED.
/ON FUNDS .............