WEDNESDAY, MAY 4,
1988
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'PHILOSOPHICAL RESPONSE WAS SOUGHT
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THE FINANCIAL SECRETARY, THE HON PIERS JACOBS, EMPHASISED IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY) THAT HE WAS NOT PROPOSING TO ALTER THE BALANCE BETWEEN DIRECT AND INDIRECT TAXES WITHOUT THE MOST CAREFUL CONSIDERATION OF THE FINANCIAL AND ECONOMIC EFFECTS.
MR JACOBS SAID HE HAD LISTENED WITH PARTICULAR INTEREST TO MEMBERS' VIEWS ON HIS BUDGET SPEECH REMARKS THAT A MEASURE OF TAX DIVERSIFICATION, TOGETHER WITH SOME RATIONALISATION OF EXISTING INDIRECT TAXES, MIGHT WELL BE A PRACTICAL PROPOSITION IN HONG KONG.
"BY REFERRING TO THIS MATTER IN MY BUDGET SPEECH. I HAD HOPED TO GENERATE A MORE PHILOSOPHICAL AND LESS POLITICAL RESPONSE IN THIS COUNCIL," HE SAID IN HIS SPEECH WINDING UP DEBATE ON THE APPROPRIATION BILL 1988.
HE HAD NOT ACTUALLY PROPOSED THE INTRODUCTION OF A SALES TAX EITHER FOR THIS YEAR OR THE NEAR FORESEEABLE FUTURE, HE SAID.
"BECAUSE THERE WAS NO SPECIFIC PROPOSAL, I DO NOT NECESSARY TO ANSWER EACH AND EVERY POINT MADE BY MEMBERS.
CONSIDER IT'
"OF COURSE, MANY OF THE COMMENTS MADE WERE ENTIRELY VALID, AND INDEED HAVE BEEN UPPERMOST IN OUR MINDS IN PUTTING OUR IDEAS TOGETHER.
"CLEARLY, THE INFLATIONARY IMPACT OF ANY INDIRECT TAX WOULD HAVE TO BE CAREFULLY ASSESSED AND 1 WOULD CERTAINLY BE VERY HESITANT ABOUT INTRODUCING SUCH A TAX DURING A PERIOD OF RISING INFLATION.
MR JACOBS SAID THE POINT HE WAS MAKING IN HIS BUDGET SPEECH WAS THAT A MEASURE OF TAX DIVERSIFICATION COULD WELL LEAD ΤΟ A MORE STABLE TAX REGIME.
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"BY THIS I MEANT A TAX REGIME MORE RESILIENT AND BETTER TO WITHSTAND DIFFICULT TIMES WITHOUT MAJOR ADJUSTMENTS EITHER IN RATES OF TAX OR SOURCES OF REVENUE.
FURTHERMORE, IT WOULD GIVE ME THE OPPORTUNITY AND SCOPE FOR RATIONALISING SOME OF THE EXISTING INDIRECT TAXES, HE SAID.
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IN OTHER WORDS, I MIGHT BE ABLE TO REDUCE OR ABOLISH SOME OF THE EXISTING INDIRECT TAXES, AND INDEED MIGHT ALSO BE ABLE ΤΟ REDUCE SOME DIRECT TAXES.
"I WOULD NOT WISH TO SUGGEST A TRADE-OFF AT THIS STAGE, BUT IT 1S WORTHWHILE BEARING IN MIND THE POSSIBILITIES. CLEARLY, A TAX REGIME BASED ON LOWER DIRECT TAXES WOULD BE MORE CONDUCIVE TO INVESTMENT.
"IT WOULD BE REMISS OF
ME NOT TO THINK ALONG THESE LINES AGAINST THE POSSIBILITY OF A LESS BUOYANT FINANCIAL POSITION THAN WE ENJOY AT THE PRESENT TIME.
MR JACOBS ADDED THAT HE WAS GRATEFUL TO THOSE MEMBERS WHO HAD ENCOURAGED HIM TO CONTINUE WITH HIS STUDIES.
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