XN000022-1987-03-18 — Page 6

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WEDNESDAY, MARCH 18, 1987

+WHEN ADDITIONAL REVENUE IS NEEDED, THE REAL YIELD ARGUMENT CAN BE USED TO JUSTIFY A PARTICULAR INCREASE, BUT IF THE REVENUE IS NOT NEEDED, THERE IS NO EARTHLY REASON WHY THE RATES SHOULD NOT BE LEFT ALONE, OR REDUCED, OR ABOLISHED ALTOGETHER, SHE SAID.

MISS DUNN ALSO CALLED FOR FURTHER IMPROVEMENTS IN THE PRESENTATION OF THE BUDGET AND RELATED DOCUMENTS, EMPHASISING THE NEED FOR COMPLETE, CLEAR AND COMPREHENSIBLE INFORMATION.

SHE SUGGESTED THAT AN EDITOR BE APPOINTED FOR ALL BUDGET DOCUMENTS TO ENSURE CLARITY AND CONSISTENCY.

MORE IMPORTANTLY, A CLEAR DEFINITION OF THE PUBLIC SECTOR WAS NEEDED AND SHE HOPED THE FINANCIAL SECRETARY WOULD CONTINUE THE STRUGGLE TO FIND A SENSIBLE AND ACCEPTABLE DEFINITION.

+ IT IS AS ABSURD TO PRETEND THAT THE MTRC AND THE KCRC ARE NOT IN THE PUBLIC SECTOR AS IT IS TO PRETEND THAT SUBVENTIONS TO PRIVATE OR QUASI-PRIVATE INSTITUTIONS ARE NOT PART OF PUBLIC SECTOR EXPENDITURE, SHE SAID.

SUPPORT FOR MAINTAINING LOW TAX REGIME

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THE HON CHEN SHOU-LUM SAID TODAY (WEDNESDAY) THAT HE FULLY SUPPORTED THE BROAD PRINCIPLE OF MAINTAINING A LOW AND PREDICTABLE TAX REGIME IN HONG KONG TO ATTRACT FOREIGN INVESTMENT.

HE SAID HE WAS ALSO IN SUPPORT OF THE FINANCIAL SECRETARY'S REMARK THAT A HIGHER CONTRIBUTION FROM INDIRECT TAXES WAS MORE DESIRABLE IN THE LONGER TERM FOR HONG KONG.

SPEAKING DURING THE BUDGET DEBATE IN THE LEGISLATIVE COUNCIL, MR CHEN SAID: +1 AM IN FAVOUR OF A DIFFERENT MIX OF DIRECT AND INDIRECT TAXES, MOVING PROGRESSIVELY TOWARDS A HIGHER PROPORTION OF INDIRECT TAX IN OUR REVENUE STRUCTURE.+

HE SAID HE BELIEVED THERE SHOULD BE A MORE EQUITABLE ARRANGEMENT SINCE OUT OF A POPULATION OF SIX MILLION, THERE WERE ONLY ABOUT 850 000 DIRECT TAXPAYERS IN HONG KONG, MOST OF WHOM WERE SALARY EARNERS WHO HAD NO OTHER MEANS TO MITIGATE THE EFFECT OF TAX INCREASE APART FROM HOPING FOR A SALARY ADJUSTMENT.

BY INCREASING THE INDIRECT TAX COMPONENT OF THE REVENUE, MR CHEN SAID WE WOULD HAVE A MUCH BETTER CHANCE OF MAINTAINING OUR LOW AND PREDICTABLE TAX REGIME.

/+BY BROADEN INO