XN000022-1991-03-06 — Page 31

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WEDNESDAY, MARCH 6, 1991

PRESENTING HIS BUDGET FOR 1991-92, THE FINANCIAL SECRETARY STATED THAT THE GOVERNMENT STRATEGY FOR REVENUE WAS AIMED AT MAINTAINING RECURRENT REVENUE AT A LEVEL WHICH WOULD COVER BOTH RECURRENT EXPENDITURE AND AT LEAST HALF OF THE GOVERNMENT'S CAPITAL EXPENDITURE.

LEVEL.

"IN ADDITION, WE SEEK TO KEEP OUR RESERVES AT AN ADEQUATE

"

WE

ARE ALSO CONCERNED TO ENSURE THAT WE DO NOT BECOME OVER- RELIANT ON DIRECT TAXES, WHILE RECOGNISING THE INFLATIONARY IMPACT OF SOME INDIRECT TAXES.

"THE REVENUE MEASURES IN THIS YEAR'S BUDGET ARE CONSISTENT WITH THIS STRATEGY," SIR PIERS SAID.

AS REGARDS INDIRECT TAXES, THE FINANCIAL SECRETARY SAID HE ASSESSED WITH CARE THE LIKELY EFFECT ON INFLATION OF ANY PROPOSED INCREASES.

"THIS YEAR, MY INDIRECT TAX MEASURES WILL HAVE SOME IMPACT ON THE COST OF LIVING, BUT LARGELY INVOLVING LUXURY OR NON-ESSENTIAL ITEMS WHERE THE INDIVIDUAL CONSUMER CAN CHOOSE WHETHER TO PURCHASE OR NOT.

"GIVEN THIS ELEMENT OF PERSONAL CHOICE, AND IN THE LIGHT OF THE NEED FOR ADDITIONAL REVENUE IN 1991-92, I BELIEVE THE TAX INCREASES I HAVE SELECTED ARE JUSTIFIABLE, HE SAID.

HYDROCARBON OILS

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THE FINANCIAL SECRETARY PROPOSED TO INCREASE THE DUTY RATE OF HYDROCARBON OILS BY FIVE PER CENT.

HE POINTED OUT THE GOVERNMENT USUAL POLICY ON HYDROCARBON OILS HAD BEEN TO AT LEAST MAINTAIN THE DUTY YIELD IN REAL TERMS.

"SINCE THE START OF THE GULF CRISIS LAST AUGUST, CRUDE OIL PRICES HAVE BEEN PARTICULARLY VOLATILE. ACCORDINGLY, AND EXCEPTIONALLY, I PROPOSE ON THIS OCCASION TO INCREASE THE DUTY RATE BY ONLY FIVE PER CENT INSTEAD OF THE 10 PER CENT I WOULD OTHERWISE HAVE IMPOSED," HE SAID.

**THIS HAS THE ADDED ADVANTAGE OF CARRYING WITH IT LESS OF AN INFLATIONARY IMPACT THAN WOULD OTHERWISE HAVE BEEN THE CASE.

"THE RATE ON MOTOR SPIRIT WILL THUS BE INCREASED FROM $3.58 TO $3.76 A LITRE AND ON DIESEL OIL FOR ROAD VEHICLES FROM $1.78 TO $1.87 A LITRE. I ESTIMATE THE ADDITIONAL REVENUE YIELD TO BE $135 MILLION, THE FINANCIAL SECRETARY SAID.

THE REFUND ON DIESEL OIL TO THE FRANCHISED BUS COMPANIES REMAIN AT 65 CENTS A LITRE. THE COST OF THE DUTY INCREASE THESE COMPANIES TAKEN TOGETHER WOULD BE ABOUT $12 MILLION.

וז

WOULD TO ALL

"THE EFFECT,