XN000022-1992-03-04 — Page 38

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WEDNESDAY, MARCH 4, 1992

I WOULD NOW LIKE TO EXPLAIN MY REVENUE PROPOSALS. I HAVE HAD TO LOOK FOR ADDITIONAL REVENUE, OF COURSE. BUT I HAVE ALSO HAD WIDER AIMS. I WANT TO AVOID ADDING TO INFLATION. AND, THROUGH TAX REDUCE THE TAX BURDEN ON A BROAD SECTION OF THE

CONCESSIONS, ΤΟ COMMUNITY.

MY FIRST

PROPOSAL IS TO INCREASE CORPORATE PROFITS TAX FROM 16.5% TO 17.5%. THIS IS A MODEST INCREASE WHICH LEAVES THE RATE OF PROFITS TAX A FULL PERCENTAGE POINT BELOW ITS HISTORICAL HIGH. THIS INCREASE WILL HAVE NO SIGNIFICANT IMPACT ON EITHER LOCAL OR INTERNATIONAL ENTHUSIASM TO INVEST IN HONG KONG.

I HAVE ALSO DECIDED TO INCREASE THE GENERAL RATES FOR THE COMING YEAR BY A HALF OF ONE PER CENT. THIS WILL MEAN THAT THE TOTAL CHARGE TO RATES WILL BE 6%. RATES ARE CURRENTLY AT AN ALL-TIME LOW. THEY ARE EQUAL TO ONLY ABOUT 2% OF HOUSEHOLD INCOMES. FOR BUSINESSES, RATES ARE LESS THAN 1% OF AVERAGE OPERATING EXPENSES. MY PROPOSALS WILL HAVE A NEGLIGIBLE IMPACT ON THE RATE OF INFLATION AS MEASURED THE CPI(A). AND RATES IN HONG KONG WILL CONTINUE TO BE VERY LOW BY INTERNATIONAL STANDARDS.

BY

THESE WERE THE TAX INCREASES. BUT I WAS ALSO ABLE TO PROPOSE TAX CUTS. MY TAX CONCESSIONS HAVE TWO AIMS. FIRST, TO ABOLISH TAXES. ON CERTAIN NON-LUXURY ITEMS WHICH DIRECTLY AFFECT THE COST OF LIVING FOR ORDINARY FAMILIES. SECOND, TO EASE THE BURDEN ON THOSE LIABLE ΤΟ SALARIES TAX.

THE FIRST AIM WILL BE MET BY ABOLISHING THE DUTY ON SOFT DRINKS AND THE ENTERTAINMENT TAX ON CINEMA TICKETS. I SHALL ALSO EXEMPT FRANCHISED BUS COMPANIES FROM THE DUTY ON DIESEL FUEL WHICH WILL HELP TO KEEP BUS FARES DOWN.

ΤΟ

I PROPOSE то ACHIEVE MY SECOND AIM, TO EASE THE BURDEN ON SALARIES TAXPAYERS, BY AN ACROSS-THE-BOARD INCREASE OF ABOUT 12 PER CENT IN PERSONAL ALLOWANCES. THIS WILL PROVIDE WELCOME RELIEF TAXPAYERS. IT WILL ALSO MEAN THAT A LARGE NUMBER OF PEOPLE

WILL LONGER HAVE TO PAY ANY SALARIES TAX AT ALL. THEY WILL JOIN THE VERY LARGE NUMBER OF EMPLOYEES

PAY NOT SALARIES TAX.

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OVER HALF WHO

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ALREADY

DO

4

NO

AS I TOLD THE COUNCIL THIS AFTERNOON, MY FIRST PRIORITY · AS FINANCIAL SECRETARY MUST BE TO ENSURE HONG KONG'S CONTINUED ECONOMIC SUCCESS. AT THE SAME TIME, MY DUTY IS TO FIND THE RESOURCES ΤΟ RESPOND TO THE COMMUNITY'S CHANGING EXPECTATIONS. TO ACHIEVE THIS, MY BUDGETS WILL HAVE A COMMITMENT TO ECONOMIC GROWTH, A COMMITMENT TO SOUND FINANCIAL MANAGEMENT AND A FIRM COMMITMENT то IMPROVING OUR PUBLIC SERVICES. IN THIS WAY, I BELIEVE HONG KONG WILL CONTINUE ΤΟ PROSPER; INCOMES AND PROFITS WILL RISE; AND THE QUALITY OF LIFE FOR THE WHOLE COMMUNITY WILL CONTINUE TO IMPROVE.

GOOD NIGHT.

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