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WEDNESDAY, MARCH 18, 1987
+BY BROADENING THE SOURCE FROM WHICH OUR TAX REVENUE IS DERIVED, NOT ONLY WILL THE GOVERNMENT BE LESS VULNERABLE TO FLUCTUATIONS IN OUR ECONOMIC PERFORMANCE WHICH COULD BRING ABOUT A REDUCTION IN REVENUE FROM DIRECT TAXES. THE SO CALLED SANDWICHED CLASS WILL ALSO BE RELIEVED FROM BEARING THE BRUNT OF THE TAX BURDEN.
+MOREOVER, IT IS IN LINE WITH THE SPIRIT OF OPEN GOVERNMENT THAT WHILST DEMANDING A MORE ACTIVE ROLE IN THE ADMINISTRATION OF HONG KONG, OUR CITIZENS SHOULD ALSO LEARN TO ACCEPT THEIR OBLIGATION OF CONTRIBUTING TOWARDS THE RESOURCES REQUIRED FOR THE EFFICIENT FUNCTIONING OF OUR GOVERNMENT, HE SAID.
MR CHEN EMPHASISED THAT ANY INCREASE ON INDIRECT TAXES SHOULD NOT BE AIMED AT SHIFTING THE TAX BURDEN ONTO THE LESS WELL-OFF MEMBERS OF THE COMMUNITY.
ON THE IMPOSITION OF GENERAL SALES TAX, HE SAID HE DID NOT SUPPORT THE VALUE ADDED TAX (VAT) SYSTEM.
HE SAID THIS WOULD BRING ABOUT A MAJOR DEPARTURE FROM OUR PHILOSOPHY OF MAINTAINING A SIMPLE AND EASY-TO-ADMINISTER TAX SYSTEM IN HONG KONG.
+WORST STILL, SUCH A SWEEPING TAX REFORM WILL CREATE INCENTIVES FOR TAX AVOIDANCE AND LEAD TO COSTLY ENFORCEMENT PROBLEMS.
+RATHER THAN INTRODUCING A NEW FORM OF TAXATION, THEREFORE
IT SEEMS MORE LOGICAL FOR US TO PROCEED ON THE BASIS OF OUR EXISTING SYSTEM AND BRINGING IN, ON A PROGRESSIVE MANNER, MORE CATEGORIES OF PRODUCTS INTO THE TAX NET, HE SAID.
IN THIS REGARD, MR CHEN AGREED WITH THE FINANCIAL SECRETARY THAT A PRACTICAL APPROACH SHOULD BE ADOPTED TO AVOID ANY DAMAGE TO THE CONFIDENCE OF FOREIGN INVESTORS.
NEED TO RATIONALISE TAX SYSTEM
*****
THERE IS A NEED TO RATIONALISE THE PRESENT TAX SYSTEM TO ENSURE THAT THE RIGHT BALANCE AND EMPHASIS IS MAINTAINED AND ENHANCED, THE HON PETER C. WONG SAID TODAY (WEDNESDAY).
SPEAKING DURING THE BUDGET DEBATE IN THE LEGISLATIVE COUNCIL, MR WONG NOTED THAT THE FINANCIAL SECRETARY HAD IN HIS FIRST BUDGET SPEECH INVITED DISCUSSION ON TWO POSSIBLE CHANGES TO MAKE THE PRESENT TAX SYSTEM MORE EQUITABLE AND FLEXIBLE.
THE FIRST ............
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