WEDNESDAY, NOVEMBER 25, 1987
HE SAID THAT IF HE HAD LEFT THE CHANGE UNTIL THE NEXT BUDGET, IT WOULD MERELY HAVE MEANT THAT THE EFFECTS OF ANY REVENUE DISTORTION WOULD MOSTLY HAVE BEEN FELT IN 1988-89 INSTEAD OF IN THIS FINANCIAL YEAR. INTRODUCING THE CHANGES NOW WOULD HAVE THE ADVANTAGE OF CONFINING ALL THE DISTORTION WITHIN THIS FINANCIAL YEAR. THIS WOULD ENABLE THE NEW SYSTEM TO OPERATE THROUGHOUT 1988-89.
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I SHOULD STRESS AGAIN THE NATURE OF THIS DISTORTION. IT DOES NOT REPRESENT A GIFT TO THE MANUFACTURERS. IT SIMPLY REPRESENTS THE EARLIER THAN USUAL REPAYMENT OF MONEY THAT WOULD BR DUE TO THEM ANYWAY IN RESPECT OF TOBACCO PRODUCTS EXPORTED FROM HONG KONG,' HE SAID.
ON THE EFFECT OF THE REMOVAL OF THE DIFFERENTIAL ON LOCAL MANUFACTURERS, MR JACOBS SAID ALTHOUGH IT WAS DIFFICULT TO MAKE A DETAILED ASSESSMENT, IT WAS PERHAPS USEFUL TO NOTE THAT OVER 80 PER CENT OF LOCALLY MADE CIGARETTES WERE EXPORTED AND THUS WERE CURRENTLT
ELIGIBLE FOR DRAWBACK OF DUTIES.
ADDITIONALLY, UNDER THE NEW DUTY REGIME ALL MANUFACTURERS WILL GAIN THE BENEFIT OF AVOIDING THE NEED TO PREPAY DUTY, AND THEN IN DUF COURSE TO APPLY FOR DRAWBACK OF DUTY, ON PRODUCTS DESTINED FOR EXPORT.
"FURTHERMORE, THE RATE OF DIFFERENTIAL HAS BEEN REDUCED OVER THE YEARS, AND GOVERNMENT HAS ON A NUMBER OF OCCASIONS STATED ITS INTENTION OF ELIMINATING THE DIFFERENTIAL ALTOGETHER. THE LOCAL TRADE HAS BEEN WARNED THAT GOVERNMENT COULD NOT ASSURE THEM FOREVER THE RELATIVE BENEFITS THAT THEY HAVE ENJOYED IN THE PAST, MR JACOBS SAID.
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CONCERNING THE EFFECT ON CIGARETTE RETAIL PRICES, MR JACOBS EXPECTS IT TO VARY BETWEEN BRANDS DEPENDING ON THEIR CURRENT TOBACCO WEIGHT CONTENTS. HEAVIER THAN AVERAGE CIGARETTES WILL ATTRACT LESS DUTY THAN BEFORE. LIGHTER THAN AVERAGE CIGARETTES WILL ATTRACT MORE DUTY THAN BEFORE.
t
OR NOT TO ABSORB
"THERE WILL BE WINNERS' AND 'LOSERS' AMONGST BOTH IMPORTED AND LOCALLY MANUFACTURED BRANDS. AS REGARDS ACTUAL RETAIL PRICES, IT WILL BE UP TO THE MANUFACTURERS TO DECIDE WHETHER DUTY INCREASES INTO CURRENT RETAIL PRICES AND CONVERSELY WHETHER OR NOT PASS ON THE BENEFITS OF DUTY DECREASES TO CONSUMERS,
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HE SAID.
INTO THE ORDINANCE TO
TIK FINANCIAL SECRETARY WILL IN DUE COURSE INTRODUCE COUNCIL AN AMENDMENT BILL TO THE DUTIABLE
FORMALISE THE CHANGES.
COMMODITIES
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