XN000022-1988-04-21 — Page 8

THURSDAY, APRIL 21, 1988

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INDIRECT TAX STABLE SOURCE OF REVENUE

INDIRECT TAX IS A RELATIVELY STABLE SOURCE OF REVENUE WHICH WILL BE LESS VULNERABLE TO THE UPS AND DOWNS OF THE ECONOMY BECAUSE IT IS A LEVY ON THE BASIS OF CONSUMPTION AND NOT ON THE AMOUNT OF PROFITS MADE, AND IT IS ALSO A MORE EQUITABLE FORM OF TAX.

THE HON YEUNG PO-KWAN SAID THIS DURING THE BUDGET THE LEGISLATIVE COUNCIL TODAY (THURSDAY) WHEN SPEAKING IN THE PRINCIPLE OF BROADENING THE BASE FOR INDIRECT TAX.

DEBATE IN SUPPORT

OF

MR YEUNG SAID THE INCREASE OF INDIRECT TAX COULD HAVE OTHER POSITIVE EFFECTS SUCH AS PROMOTING THE SPIRIT OF FRUGALITY, REDUCING AN OVERHEATED DOMESTIC ECONOMY AND PRE-EMPTING DIFFICULTIES THAT MIGHT ARISE WHEN ECONOMIC DEVELOPMENT SLACKENED.

HE DESCRIBED THE BUDGET AS ONE THAT HAD TAKEN CARE OF THE INTEREST OF EVERY SECTOR IN THE COMMUNITY, PARTICULARLY THOSE IN THE MIDDLE INCOME GROUP.

THE CONCESSION ON STAMP DUTY WOULD DEFINITELY BOOST THE INTEREST OF PROPERTY BUYERS, AND ENCOURAGE PEOPLE IN THE MIDDLE INCOME GROUP TO BUY HOMES.

"IT WILL NO DOUBT GIVE OUR PROPERTY MARKET 'A SHOT IN THE ARM' AND ACT AS A STIMULUS TO THE DEMAND IN PROPERTIES. HENCE, IT IS NEGATIVE EVIDENCE THAT OUR ECONOMY WILL SLOW DOWN NEXT YEAR, HE SAID.

**

THE

HOWEVER, HE CRITICISED THE BUDGET FOR PROVIDING VERY FEW INCENTIVES TO NEW INVESTMENT AND FOR DOING LITTLE TO ACCELERATE PACE OF BOTH LOCAL AND OVERSEAS INVESTMENT.

WIVES

MR YEUNG BELIEVED THAT ADDITIONAL ALLOWANCES FOR WORKING WOULD ENCOURAGE MORE WOMEN ΤΟ WORK, WHICH WOULD IN TURN HELF ALLEVIATE THE LABOUR SHORTAGE PROBLEM AND MAINTAIN THE PRINCIPLE EQUITY IN TAXATION,

A MORE "VIGOROUS" APPROACH SHOULD BE ADOPTED GOVERNMENT'S POLICY ON PROFITS TAX, HE SAID.

OF

IN THE

"AS OUR PROFITS TAX HAS ALWAYS REMAINED AT A LOW LEVEL, IT WILL BE MORE REALISTIC IF ΤΠΕ GOVERNMENT WOULD PROVIDE FURTHER ASSISTANCE FOR THE DEVELOPMENT OF COMMERCE AND INDUSTRY, HE SAID.

TURNING TO LAW AND ORDER, MR YEUNG REMINDED THE GOVERNMENT THAT SINCE THE ROYAL HONG KONG POLICE WOULD GRADUALLY TAKE OVER THE DUTIES OF THE BRITISH GARRISON IN

NEXT FEW YEARS,

IT

ΤΟ HAD STRENGTHEN ITS ABILITY 1N MAINTAINING SECURITY AND IN

MEETING SUBSEQUENT ANNUAL INCREASES IN EXPENDITURE ON SECURITY.

THE

/HE SUGGESTED