XN000022-1990-06-27 — Page 42

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WEDNESDAY, JUNE 27, 1990

BALANCE OF DIRECT AND INDIRECT TAXATION NEEDS PONDERING

HOVERNMENT

THE

REDRESS

FOR

OF ITS REVENUE SOURCES, ΤΟ INSURE

STABILITY THE MU CONTINUE TO CONSCIOUSLY CONSIDER HOW BEST TO THE IMBALANCE BETWEEN DIRECT AND INDIRECT TAXATION, THE SECRETARY THE TREASURY, MR HAMISH MACLEOD, SAID TODAY (WEDNESDAY).

LONG KONG EXPORTERS' AT A SPEAKING

LUNCH MEETING OF THE

THAT AROSE IN MR MACLEOD SAID THE DIFFICULT PROMO ASSOCIATION,

SUBJECT OF A THE BALANCE BETWEEN THE TWO WERE NOT THE REDRESSING GENERAL REVIEW OF HONG KONG'S TAXATION PHILOSOPHY.

TAXATION, AN

HE ADDED THAT THE JOINT LIAISON COMMITTEE ON

AND FINANCIAL WHOSE MEMBERS INCLUDED LEGAL GROUP INDEPENDENT

IN THE PRIVATE SECTOR, HAD BEEN INVITED FOR THE FIRST

OF PROFESSIONALS

ASPECTS

HONG TIME TO GIVE THEIR VIEWS TO THE GOVERNMENT ON ALL KONG'S TAXATION SYSTEM.

MACLEOD SAID: DIRECT

TURNING то THE EXISTING TAXATION SYSTEM, MR "INDIRECT TAXATION IS NOT NECESSARILY ALWAYS MORE STABLE THAN TAXATION - THE LATTER BEING PRIMARILY PROFITS TAX AND SALARIES TAX BUT CERTAINLY IT TENDS TO BE.'

"

"HENCE THE PROPORTION OF REVENUE WHICH IS INDIRECT TAKEN AS A ROUGH INDICATOR OF STABILITY OF REVENUE. STANDS AT ONLY ABOUT 36 PER CENT," HE NOTED.

-

TAX IS PRESENTLY

THIS

YEARS OF

IT WAS NOT SURPRISING THAT AFTER SO MANY GROSS DOMESTIC PRODUCT GROWTH, HONG KONG HAD ARRIVED AT THIS POSITION.

HE SAID

THE

YIELDS FROM DIRECT TAXATION ARE ALWAYS PUSHED UP BY GROWTH IN PRESSURE ON

FLUSH ECONOMY, WHILE THERE IS ALWAYS A POLITICAL DOWNWARD

ESPECIALLY WHEN THE GOVERNMENT HAS BEEN INDIRECT TAXES, REVENUE, HE POINTED OUT.

WITH

WE SHOULD BEWARE OF LETTING THIS IMBALANCE

HE SAID. DIRECT TAXATION GET OUT OF HAND,

IN

FAVOUR OF

11

WAS HOW

IN TACKLING THIS ISSUE OF IMBALANCE, THE QUESTION

INVOLVED IN MUCH AND WHEN, MR MACLEOD SAID, ADDING THAT THE FACTORS THIS EQUATION WERE VERY COMPLICATED AND SOMETIMES OTHER FACTORS IN THE END TIP THE BALANCE IN ANOTHER DIRECTION.

WOULD

OUR

"WE HAVE TO BALANCE FOR EXAMPLE POLITICAL CONSIDERATIONS,

ΤΟ MAINTAIN A ABILITY ΤΟ COMPETE WITH OUR NEIGHBOURS AND THE NEED SIMPLE TAXATION SYSTEM WITH LOW RATES."

THE ON

POLITICAL SIDE, THE GOVERNMENT HAS QUESTION OF HOW MUCH SHOULD BE CONTRIBUTED TO THE COST PUBLIC SERVICES BY DIFFERENT SECTORS OF THE COMMUNITY.

"AT ONE

ΤΟ ANSWER THE OF PROVIDING

SHOULD PUBLIC

ARGUED THAT EVERYONE IT CAN BE EXTREME, CONTRIBUTE SOMETHING, IF ONLY TO INCULCATE A SENSE OF VALUE OF SERVICES. AT THE OTHER EXTREME, IT WILL BE ARGUED THAT ONLY THOSE MOST

** HE SAID. ABLE TO PAY SHOULD PAY,

"WITH DIRECT