HONG KONG: THE BUDGET
This year's budget provides for increases in taxation totalling HK$467 million.
Company profits tax was raised by 10% and will yield an additional HK$100 million in a full year. The Financial Secretary also foreshadowed a new tax on dividends to be introduced in the next financial year; and he announced his intention to appoint a Committee to examine the present tax structure which he recognised to be progressive only at the lower income levels.
As in previous years, social services including education, medical and health services and housing, are allocated the highest priority. A record sum of HK$3,057 million representing 41.8% of total expenditure will be allocated to this purpose.
The ratio of total public expenditure to Gross Domestic Product averaged 15% over the ten years to 1973/74. As a result of the very large increase in expenditure in 1974/75 this has risen to nearly 20%. This is a large proportion for an economy at Hong Kong's level of development.
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