XN000022-1975-02-05 — Page 15

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WEDNESDAY, FEBRUARY 5, 1975

INCREASE OF HOTEL ACCOMMODATION TAX

FROM TWO TO THREE PER CENT IN APRIL THIS YEAR

******

THE RATE OF HOTEL ACCOMMODATION TAX, WHICH CONTRIBUTES TO THE HONG KONG TOURIST ASSOCIATION'S INCOME, IS TO BE INCREASED FROM TWO PER CENT TO THREE PER CENT FROM APRIL 1 THIS YEAR AND TO FOUR PER CENT FROM APRIL 1, 1976.

WHEN SPEAKING ON A RESOLUTION ON THIS INCREASE IN LEGISLATIVE COUNCIL TODAY, THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE SAID THE INCREASE HAD BEEN AGREED BY THE HONG KONG HOTELS ASSOCIATION AND SHOULD ENSURE THAT THE TOURIST ASSOCIATION IS +WELL-PLACED TO MEET THE CHALLENGE POSED BY THE CURRENT UNCERTAIN ECONOMIC CLIMATE AND INCREASED COMPETITION FROM OTHER DESTINATION+.

MR. HADDON-CAVE RECALLED THAT ALTHOUGH THE ASSOCIATION'S TOTAL INCOME HAD INCREASED FROM $10.7 MILLION TO $16.7 MILLION IN THE PAST THREE YEARS, IT WAS AT A TIME WHEN COSTS HAD BEEN RISING AT AN EXCEPTIONAL RATE, ESPECIALLY IN SOME OVERSEAS CENTRES.

TO HELP THE ASSOCIATION MAINTAIN AN EFFECTIVE LEVEL OF OPERATION DURING THESE YEARS, THE GOVERNMENT HAS PROVIDED ADDITIONAL GRANTS ON AN AD HOC BASIS, OVER AND ABOVE THE ANNUAL SUBVENTION, OF BETWEEN $1.2 MILLION AND $1.5 MILLION PER YEAR, HE SAID.

HE EXPLAINED THAT THE MAIN REASON FOR THE GROWING IMBALANCE BETWEEN INCOME AND EXPENDITURE, UNDER THE PRESENT FORMULA, WAS A LACK OF BUOYANCY IN THE YIELD FROM HOTEL ACCOMMODATION TAX.

+THIS, IN TURN, HAS BEEN CAUSED BY A GROWTH IN THE PROPORTION OF VISITORS, CURRENTLY ABOUT 45 PERCENT, WHO COME ON GROUP TOURS AND ENJOY DISCOUNTED ROOM RATES, MR. HADDON-CAVE SAID.

HE ADDED THAT EVEN AT FOUR PERCENT, THE TAX WOULD BE LOWER THAN THAT IMPOSED ELSEWHERE PARTICULARLY WITHIN THE REGION AND WAS NOT EXPECTED TO DETER WOULD-BE VISITORS,

THE HON. J.H. BREMRIDGE WHO IS ALSO CHAIRMAN OF THE TOURIST ASSOCIATION SPOKE IN SUPPORT OF THE RESOLUTION.

+I BELIEVE THAT ALL MEMBERS OF THIS CHAMBER. OF THE TOURIST INDUSTRY, AND THE PUBLIC AT LARGE ACKNOWLEDGE THE TASK THAT THE TOURIST ASSOCIATION IS PERFORMING TO THE BEST OF ITS ABILITIES IN DIFFICULT ECONOMIC CIRCUMSTANCES ON BEHALF OF THE COMMUNITY,+ HE SAID.

+THE CONTRIBUTION THAT VISITORS MAKE TO HONG KONG'S ECONOMY A NET INCOME OF OVER HK$1,800 MILLION A YEAR UNDERLINES THE IMPORTANT FUNCTION OF THE TOURIST ASSOCIATION IN SELLING HONG KONG'S ATTRACTIONS+.

/HE ALSO