XN000022-1990-03-07 — Page 46

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WEDNESDAY, MARCH 7, 1990

"I AM WELL AWARE THAT ANY INCREASE IN TAXATION IS UNWELCOME. 80, IN PUTTING TOGETHER MY REVENUE PROPOSALS, I HAVE SOUGHT TO SPREAD THE BURDEN AS FAIRLY AS POSSIBLE AND TO MINIMISE THE EFFECT ON THE LESS WELL-OFF.

"'I HAVE LOOKED FOR ADDITIONAL REVENUE FROM PROPERTY RATES. PETROL, LIQUOR. TOBACCO, BETTING, AND VEHICLE AND DRIVING LICENCES. AS USUAL, I SHALL ALSO BE ADJUSTING A NUMBER OF FEES AND CHARGES. TOGETHER, ALL THESE INCREASES WILL BRING IN ADDITIONAL REVENUE OF ABOUT $4 BILLION.

"THE MOST SIGNIFICANT PART OF THIS INCREASED REVENUE IS DERIVED FROM GENERAL RATES. RATES ON PROPERTY PROVIDE A PARTICULARLY STABLE SOURCE OF REVENUE AND THIS IS OF GREAT IMPORTANCE IN RELATION TO OUR FUTURE PROGRAMME OF PUBLIC EXPENDITURE. I HAVE THEREFORE INCREASED GENERAL RATES BY ONE AND A HALF PERCENTAGE POINTS, TAKING TOTAL PROPERTY RATES TO SEVEN AND A HALF PER CENT.

"QUITE SEPARATELY, IN 1991 WE SHALL BE REVISING ALL RATEABLE VALUES. IF RATEABLE VALUES GO UP SUBSTANTIALLY, AS THEY PROBABLY WILL, I SHALL IN MY NEXT BUDGET LOOK AT THE PERCENTAGE RATE AGAIN.

"WITHOUT MAKING ANY COMMITMENT AT THIS STAGE, IT IS CERTAINLY NOT MY INTENTION TO INCREASE THE BURDEN UNNECESSARILY, BUT I SHALL HAVE TO KEEP IN VIEW OUR NEED FOR REVENUE AT THAT TIME.

TO

THIS

"LAST YEAR, I WAS ABLE TO REDUCE SALARIES AND PROFITS TAXES THEIR 1983 LEVELS. I HAVE NOT ADJUSTED THE STANDARD RATES OF TAX YEAR, BUT I HAVE INCREASED SOME PERSONAL ALLOWANCES. I HAVE ALBO ADJUSTED THE LOWER BANDS OF SALARIES TAX. THESE CONCESSIONS WILL HELP THE LOWER AND MIDDLE INCOME GROUPS. ADDITIONALLY, I HAVE PROPOSED A NUMBER OF CONCESSIONS IN RELATION TO ESTATE DUTY. TAKEN TOGETHER, THESE MEASURES WILL BENEFIT TAXPAYERS BY NEARLY $1 BILLION.

"FOR THE MOMENT I DO NOT INTEND TO CARRY FORWARD MY PROPOSALS FOR A WHOLESALE TAX. I HAVE PUT THIS IDEA ON THE BACKBURNER. NEVERTHELESS, MY REVENUE MEASURES HAVE THIS YEAR SLIGHTLY SHIFTED THE BURDEN OF TAXATION FROM DIRECT TO INDIRECT TAXES, WHICH I CONSIDER TO BE RIGHT IN OUR CIRCUMSTANCES.

"I AM CONSCIOUS THAT HIGHER INDIRECT TAXES, BY THEIR VERY NATURE, CAN LEAD TO AN INCREASE IN PRICES, BUT I AM SATISFIED THAT THE TOTAL PACKAGE WILL HAVE ONLY A MARGINAL EFFECT.

"IN PLANNING FOR OUR FUTURE WE MUST LOOK WELL BEYOND 1990. WE HAVE AMBITIOUS LONG TERM OBJECTIVES AND MY BUDGET ESTABLISHES A SOUND FOUNDATION FOR THEIR ULTIMATE ACHIEVEMENT. WE ARE INVESTING IN OUR FUTURE AND THAT INVESTMENT IS ESSENTIAL TO OUR CONTINUED PROGRESS.

"HONG KONG HAS BECOME AN INTERNATIONAL TRADING AND FINANCIAL CENTRE, WITH PERSONAL INCOMES AMONG THE HIGHEST IN THE REGION. THIS HAS BEEN ACHIEVED ONLY BY PLANNING AHEAD AND BY MEETING CHALLENGES AND OVERCOMING DIFFICULTIES AS THEY ARISE. I AM CONFIDENT THAT THE SKILLS, DRIVE AND RESOURCEFULNESS OF OUR COMMUNITY WILL CONTINUE TO SECURE OUR SUCCESS AND PROSPERITY IN THIS NEW DECADE."

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