XN000022-1984-03-29 — Page 7

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THURSDAY, MARCH 29, 1984

MR CHAN SAID THAT WHILE THE CORPORATE TAX RATE WOULD INCREASE FROM 16-1/2 PER CENT TO 18-1/2 PER CENT WHICH IS A 12.12 PER CENT INCREASE. THE WORKER'S SALARY TAX RATE WOULD INCREASE FROM

15 PER CENT TO 17 PER CENT OR 13.3 PER CENT INCREASE, HE ARGUED.

HE SAID THAT AN ADDITIONAL TAX BURDEN OF $614 MILLION SPREAD OVER 152 065 BUSINESS ESTABLISHMENTS (ACCORDING TO THE HONG KONG MONTHLY DIGEST OF STATISTICS DECEMBER 1983) MEANT THAT AN AVERAGE OF ONLY $4 037.74 WOULD BE PAID BY EACH ESTABLISHMENT A YEAR.

HOWEVER, AN ADDITIONAL TAX BURDEN OF $162 MILLION ADDED ONTO THE SANDWICH CLASS OF 30 000 WOULD MEAN THAT EACH MEMBER OF THE CLASS WOULD HAVE TO PAY $5 400 MORE A YEAR, MR CHAN SAID.

MR CHAN SAID ALSO THAT CONSIDERATION SHOULD BE GIVEN TO ADJUSTING UPWARDS THE PERSONAL ALLOWANCES TO REFLECT INFLATION.

HE BELIEVED THAT THERE WERE OTHER SOURCES FROM WHICH TO GET MONEY.

HE WAS GLAD, HE SAID, TO HEAR THAT BETTING TAX WOULD BE SOME $50 MILLION IN EXCESS OF THE 1983-84 ESTIMATES.

+THIS TAX IS PAID VOLUNTARILY AS THE PUBLIC LIKES TO BET, AND IF THIS 'LEISURE MONEY DOES NOT COME INTO THE PUBLIC COFFERS IT WOULD GO TO ILLEGAL TURF ACCOUNTANTS' DOING NO GOOD TO THE PUBLIC,+ HE SAID,

THREE-PRON GED APPROACH SUPPORTED

*****

HON STEPHEN CHEONG SAID TODAY THAT THE COMMUNITY, BEING WILLING TO INCREASE OUR SHARE OF CONTRIBUTIONS TO RECURRENT GENERAL REVENUE, WOULD HELP TO DEMONSTRATE TO THE WORLD THAT IT COULD BE RELIED UPON TO SHOULDER AND COUNTER EFFECTIVELY WITHIN REASON, ANY ADVERSE EFFECTS OF WHATEVER CRISIS FACING US.

SPEAKING AT THE BUDGET DEBATE. HE SAID HE SUBSCRIBED FULLY TO THE THREE-PRONGED APPROACH WHICH THE FINANCIAL SECRETARY HAD ADOPTED IN DEALING WITH THE EXPECTED DEFICIT OF $3.6 BILLION FOR THE FISCAL YEAR OF 1984-85.

+TO REDUCE OUR FISCAL RESERVE, AND TO FINANCE ONLY A PORTION OF THE DEFICIT THROUGH INCURRENCE OF PUBLIC DEBT COUPLED WITH A CONTINUED TIGHT REIN ON PUBLIC SECTOR EXPENDITURE WILL

HELP TO DEMONSTRATE TO THE WORLD THAT WE HAVE, AS ALWAYS, A SENSIBLE, RESPONSIBLE AND RESPONSIVE ADMINISTRATION, HE OBSERVED.

HE SAID THAT ONE OF THE MOST IMPORTANT FACTORS BEHIND HONG KONG'S SUCCESS FOR THE PAST TWO DECADES HAD BEEN THE GOVERNMENT'S STEADFAST ADHERENCE TO A SET OF ECONOMIC POLICIES WHICH HAVE TIME AND AGAIN ALLOWED BUSINESS TO PROSPER+.

/+HONG KONG