XN000022-1978-05-24 — Page 17

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EDNESDAY, MAY 24, 1978

MOTION TO GIVE LEGISLATIVE EFFECT

TO RAISE DUTY ON TOBACCO AND CIGARETTES

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A MOTION TO GIVE LEGISLATIVE EFFECT TO THE BUDGET PROPOSAL TO RAISE THE EXCISE DUTY ON IMPORTED TOBACCO AND CIGARETTES FROM MARCH 1 WAS ADOPTED IN THE LEGISLATIVE COUNCIL TODAY.

IN MOVING THE MOTION, THE ACTING FINANCIAL SECRETARY, THE HON, DAVID JEAFFRESON, SAID THE BUDGET PROPOSAL TO INCREASE THE RATE OF DUTY ON IMPORTED CIGARETTES BY $1.65 PER POUND TO $20.15 PER POUND WAS IMPLEMENTED WITH EFFECT FROM MARCH 1 AS A RESULT OF AN ORDER SIGNED BY THE GOVERNOR.

EXPLAINING THE DUTY INCREASE PROPOSAL, MR. JEAFFRESON SAID THERE HAS BEEN A GROWING TENDENCY FOR IMPORTED CIGARETTES TO BE MADE OF TOBACCO WHICH HAS BEEN SPECIALLY TREATED SO THAT, FOR A GIVEN WEIGHT, THE VOLUME IS INCREASED.

THE USE OF THIS KIND OF TOBACCO IN CIGARETTES HAS RESULTED IN LESS TOBACCO, BY WEIGHT, BEING INCLUDED IN CERTAIN BRANDS OF IMPORTED CIGARETTES AND THUS THE AMOUNT OF DUTY PAYABLE PER PACKET OF CIGARETTES HAS DECLINED, WITH A LOSS OF ABOUT 11 MILLION A YEAR IN REVENUE, MR. JEAFFRÉSON SAID.

HE NOTED THAT THE INCREASE HAD THE EFFECT OF ADDING SIX CENTS TO THE DUTY LEVIED ON A PACKET OF 20 IMPORTED CIGARETTES,

MR. JEAFFRESON ALSO NOTED THAT DURING THE BUDGET DEBATE THIS YEAR, AN UNOFFICIAL MEMBER, THE HON. SIR SZE-YUEN CHUNG, HAD ASKED WHY THE GOVERNMENT HAD NOT FOLLOWED THE PRINCIPLE ENUNCIATED BY THE FINANCIAL SECRETARY IN 1966 THAT DUTY SHOULD EE RAISED IN MULTIPLES OF 10 CENTS A PACKET.

+ THE ANSWER IS THAT IN THIS PARTICULAR CASE WE WERE CONCERNED SOLELY WITH RESTORING THE REVENUE YIELD AND WE FELT WE COULD DO NO MORE THAN THAT, MR. JEAFFRESON SAID.

+BUT I CAN ASSURE MY HONOURABLE FRIEND THAT THE 1966 PRINCIPLE HAS BEEN NEITHER FORGOTTEN NOR DISCARDED,+ HE ADDED.

SPEAKING IN THE DEBATE ON THE MOTION, SIR SZE-YUEN SAID IT IS RATHER A PITY THAT THE FINANCIAL SECRETARY HAS IGNORED THE 1956 PRINCIPLE IN THIS CASE.

+ IN CONSEQUENCE, IN ORDER TO RECOUP THE 311 MILLION ANNUAL LOSS OF REVENUE FROM THE CONSUMERS, THE IMPORTERS AND DEALERS ARE PRESENTED WITH A GIFT OF 17 KILLION A YEAR AND THE CONSUMERS HAVE TO PAY OUT A TOTAL OF 18 MILLION A YEAR, + SIR SZE-YUEN SAID.

+ SIMPLY CANNOT SEE THE LOGIC OF LETTING THE IMPORTERS AND DEALERS RECEIVE THIS WINDFALL WHICH COULD HAVE EASILY BEEN DIRECTED INTO PUBLIC REVENUE.

+ALTHOUGH THE SUM OF $7 MILLION IS TRIVIAL WHEN WE HAVE AN ANNUAL SURPLUS OF $1,000 MILLION, YET IT IS A MATTER OF PRINCIPLE,+ SIR SZE-YUEN SAID.

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