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Mr Tsang said Hong Kong was famous around the world for having a tax system based on low taxes that were simple to understand, to implement and to predict.
"So potential investors know not only what taxes are going to be like this year but in broad terms what they are going to be like in five years' time and ten years' time. It is this assurance, as much as the low tax rates and their simple nature, that makes Hong Kong so attractive," he said.
Mr Tsang pointed out that the best investments took many years to pay off.
"These are the sort of investments that can best provide jobs for Hong Kong people," he said.
Mr Tsang stressed that a rigorous user-pays system for setting fees and charges was an integral part of our low tax regime.
"After all, failing to recover the cost from the user does not make the cost disappear. It simply means that the taxpayer has to pay it instead of the user," he said.
He said nonetheless where there are compelling social grounds for the Government to intervene, such as in the education and medical sectors, services are either free or heavily subsidised.
Mr Tsang said the Government would continue to combat tax avoidance and tax evasion. Two pieces of legislation have been enacted earlier this year to end the abuse of the service company system to disguise employment situation and to ensure proper records of cash transactions are kept.
Mr Tsang said tax concessions had been provided to individuals who deserved help and to enterprises to provide support for business and to keep red tape to a necessary minimum.
"And finally when applying all the above six principles we seek to pursue the seventh, which is to avoid fuelling inflation as far as possible," he said.
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