XN000022-1988-04-20 — Page 26

WEDNESDAY, APRIL 20, 1988

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STRONG RESERVATIONS ON SALES TAX IDEA

*

THERE IS NO COMPELLING REASON THAT JUSTIFIES

THE NEED ΤΟ

DISCUSS AT THIS TIME THE INTRODUCTION OF A SALES TAX, WHICH WOULD HAVE AN EXTENSIVE AND FAR-REACHING EFFECT ON THE COMMUNITY.

THE HON WONG PO-YAN SAID THIS DURING THE BUDGET DEBATE IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

EXPRESSING STRONG RESERVATIONS ABOUT SUCH AN IDEA, MR WONG SAID HE WAS DISMAYED THAT THE FINANCIAL SECRETARY SHOULD MENTION IT IN THE BUDGET WHICH PROVIDED FOR A SURPLUS AND A REDUCTION OF ONE PBR CENT IN THE STANDARD RATE OF TAXATION.

PAST

KBB

HE SAID THE ECONOMY HAD HAD ITS UPS AND DOWNS. . BUT EXPERIENCE HAD PROVIDED SUFFICIENT ASSURANCE THAT EACH ECONOMIC WOULD LAST NO LONGER THAN TWO TO THREE YEARS AND THAT HONG KONG WAS RESILIENT.

ON THE OTHER HAND, HE NOTED THAT IT WAS NECESSARY TO MAINTAIN A CERTAIN RATIO BETWEEN DIRECT ́AND INDIRECT TAXES,

"IT IS MY PERSONAL VIEW THAT EVEN WHEN THERE IS A GENUINE NEED FOR INCREASING REVENUE, THE IDEA OF A SALES TAX SHOULD BE THE LAST THING FOR CONSIDERATION," HE SAID.

HAVE

FURTHERMORE, MR WONG SAID THE INTRODUCTION OF A SALES TAX WOULD PUT A HEAVIER BURDEN ON THE POOR AND THE "SANDWICH CLASS", NEGATIVE EFFECT ON THE TOURISM INDUSTRY AND REQUIRE ADMINISTRATIVE COSTS.

HIGH

TURNING TO HOUSING POLICY, MR WONG PRAISED THE GOVERNMENT FOR ITS DETERMINATION TO DEAL WITH THE HOUSING PROBLEM.

HOWEVER, HE HOPED THAT THE GOVERNMENT WOULD EXPEDITE THE GROWTH RATE OF BOTH THE HOME OWNERSHIP AND PRIVATE SECTOR PARTICIPATION SCHEMES AND SET THE ULTIMATE TARGET THAT 50 PER CENT OF THE TOTAL PUBLIC HOUSING UNITS PRODUCED ANNUALLY SHOULD COME UNDER THESE SCHEMES.

HE SAID THE APPROACH TO STEP UP EFFORTS TO SOLVE THE HOUSING PROBLEM ON THE ONE HAND, AND ΤΟ ADJUST THE PROPORTION OF PUBLIC HOUSING TENANTS IN THE OVERALL POPULATION ON THE OTHER HAND, WOULD IN THE LONG RUN BE BENEFICIAL TO ECONOMIC AND POLITICAL DEVELOPMENT.

ON THE DEVELOPMENT OF HONG KONG'S INFRASTRUCTURE, MR WONG SAID IN THE LAST DECADE OR SO, SUBSTANTIAL ACHIEVEMENTS HAD BEEN MADE.

/HOWEVER, HE