XN000022-1990-11-30 — Page 10

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FS WILL NOT PROPOSE WHOLESALE TAX IN 1991

THE FINANCIAL SECRETARY, SIR PIERS JACOBS, SAID TODAY (FRIDAY) HE WILL NOT BE PROPOSING A WHOLESALE TAX IN 1991 BECAUSE THE GOVERNMENT IS NOT READY TO INTRODUCE IT.

THAT

TAKING QUESTIONS FROM MEMBERS OF THE MEDIA AFTER THE LUNCHEON MEETING OF THE CANADIAN CHAMBER OF COMMERCE, SIR PIERS EXPLAINED THE RATIONALE BEHIND THIS IDEA.

"I HAVE ACTUALLY BEEN DISCUSSING THIS TAX EVER SINCE MY FIRST BUDGET IN 1987. I BELIEVE AS I HAVE SAID MANY TIMES BEFORE THAT OUR EXISTING TAX SYSTEM IS VULNERABLE. BY THAT I MEAN WE MAY FROM TIME TO TIME FIND OURSELVES SHORT OF REVENUE IF THE ECONOMY WERE TO TURN DOWN. OUR YIELD ON TAX, DIRECT TAX, COULD WELL BE AT RISK.

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"ONE ADVANTAGE OF A BROAD-BASED CONSUMPTION TAX IS THAT WE BELIEVE THAT IT IS LESS VULNERABLE TO DOWNTURNS IN THE ECONOMY, HE SAID.

THEREFORE OUR WHOLE TAX-BASE WOULD BE MORE STABLE AND WOULD BR MORE APPROPRIATE TO SUPPORTING OUR PROGRAMME OF PUBLIC EXPENDITURE OVER THE YEARS AHEAD, HE ADDED.

YEAR, SIR

ASKED ABOUT HIS TAX PROPOSALS FOR THE NEXT FISCAL PIERS SAID: "NORMALLY AT THIS TIME OF THE YEAR I AM ASKED MANY QUESTIONS ABOUT WHAT MY TAX PROPOSALS ARE FOR MARCH. INVARIABLY I TELL JOURNALISTS THAT THEY WILL HAVE TO WAIT UNTIL THE TIME I DELIVER MY BUDGET.

"AT THIS MOMENT IN TIME I AM PUTTING TOGETHER VARIOUS TAX PROPOSALS. THEY WILL HAVE TO BE REFINED AND THEN NEXT YEAR WHEN I DELIVER MY BUDGET YOU WILL INDEED HAVE FULL DETAILS, HE SAID.

ON

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ASKED WHETHER THERE WERE ANY PLANS TO SET UP ANY GUIDELINES PROFITS SOURCED FROM OVERSEAS FOLLOWING THE PRIVY COUNCIL DECISION ON THE HANG SENG CASE, SIR PIERS SAID GUIDELINES WERE PROBABLY REQUIRED.

"WE HAVE REQUESTS FOR GUIDELINES FROM AT LEAST TWO SOURCES.

"THIS IS SOMETHING THAT I AM PURSUING WITH THE COMMISSIONER (OF INLAND REVENUE) AND SUBJECT TO ANY ADVICE I GET, I THINK WE WOULD HAVE TO ISSUE GUIDELINES.

"I DON'T LIKE TO SEE UNCERTAINTIES IN RELATION TO OUR TAX SYSTEM," HE SAID.

AS FOR THE PROGRESS OF THE STUDY INTO RAISING GOVERNMENT BONDS TO SUPPORT INFRASTRUCTURAL PROJECTS, SIR PIERS SAID HE HAD SAID PREVIOUSLY THAT HE BELIEVED THE PROGRAMME OF GOVERNMENT BONDS MIGHT SUIT HONG KONG'S NEEDS.

"WE ARE CARRYING OUT SOME WORK ON THIS SUBJECT IN THE APPROPRIATE BRANCH OF THE GOVERNMENT. I HAVE NO SPECIFIC ANNOUNCEMENT

TO MAKE TODAY. I WILL CERTAINLY HAVE MORE TO SAY ABOUT THIS ISSUE WHEN Ι DELIVER MY BUDGET AS YOU WILL EXPECT. BUT WHEN AND IN WHAT AMOUNTS I CANNOT AT THIS STAGE TELL YOU."

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