28
WEDNESDAY, MARCH 6, 1991
"IN CASE THERE IS ANY DOUBT, LET ME STRESS THAT THE NEED TO SECURE A MORE STABLE TAX BASE IS NOT FOR THE PURPOSE OF FINANCING AIRPORT PROJECT.
THE
"WHAT I AM CONCERNED ABOUT IS THE REQUIREMENT TO PROVIDE A MORE STABLE SOURCE OF FUNDING OVER THE LONGER TERM FOR RECURRENT EXPENDITURE, HE SAID.
HE SAID IN HIS EARLIER BUDGET SPEECHES, HE HAD ARGUED THAT A POSSIBLE SOLUTION TO THE PROBLEM COULD LIE IN THE INTRODUCTION OF A BROADLY BASED SALES TAX.
"I RECOGNISE THAT SUCH A RESTRUCTURING OF OUR TAX SYSTEM, WHICH WOULD PLACE GREAT EMPHASIS ON INDIRECT TAXATION, WOULD NECESSARILY AFFECT THE WHOLE COMMUNITY INCLUDING THOSE WHO HAVE TO DATE PAID LITTLE OR NO DIRECT TAX.
KEPT
"I BELIEVE, HOWEVER, THAT AS LONG AS ANY SUCH NEW TAX IS AT A MODEST LEVEL, AND THE ECONOMIC EFFECTS ARE MANAGEABLE, THERE SHOULD BE NO REAL CAUSE FOR CONCERN.
"WE ARE THEREFORE CONTINUING WORK ON THE PROPOSAL FOR A TAX, PROBABLY AT THE WHOLESALE LEVEL," SIR PIERS SAID.
SALES
YEAR, WOULD
THE FINANCIAL SECRETARY POINTED OUT THAT AS HE SAID LAST THE GOVERNMENT WAS NOT WORKING TO A SPECIFIC TIME-TABLE, AND HE FEEL HESITANT ABOUT INTRODUCING A SALES TAX WHILE INFLATION REMAINED AT ITS PRESENT LEVEL.
TURNING TO TAX EVASION AND TAX AVOIDANCE, SIR PIERS SAID IF THE PROBLEMS WERE NOT ADDRESSED, AND REVENUE WAS THEREBY LOST, THE AVERAGE TAXPAYER WOULD HAVE TO BEAR A HEAVIER BURDEN THAN NECESSARY.
"WITH REGARD TO EVASION, I AM NOT SUGGESTING THAT THE PROBLEM IS PARTICULARLY WIDESPREAD IN HONG KONG.
LAW.
**WE ARE SATISFIED THAT MOST OF OUR TAXPAYERS COMPLY WITH THE
"I ATTRIBUTE THIS AT LEAST IN PART TO HAVING A SIMPLE TAX SYSTEM WITH LOW RATES," HE SAID.
NEVERTHELESS, SIR PIERS SAID THE GOVERNMENT COULD NOT AFFORD TO BE COMPLACENT; EVASION CERTAINLY EXISTED. FOR THIS REASON THE COMMISSIONER OF INLAND REVENUE CONTINUED TO DEPLOY STAFF IN TACKLING THIS PROBLEM, PRODUCTIVELY.
"FROM TIME TO TIME NEW MEASURES ARE ADOPTED то ENCOURAGE COMPLIANCE, SOME MORE PAINFUL THAN OTHERS. IN THIS REGARD, THE COMMISSIONER IS PLANNING THE EARLY INTRODUCTION OF A "FIELD AUDIT" SYSTEM WHICH WILL INVOLVE OFFICERS INTERVIEWING TAXPAYERS AND CHECKING THE RECORDS AT THEIR BUSINESS PREMISES, SIR PIERS SAID.
...
THIS SYSTEM HAD BEEN ADOPTED IN A NUMBER OF COUNTRIES AND HAD PROVED TO BE AN EFFECTIVE DETERRENT, HE SAID.
/WITH REGARD