TNAG-0761-FCO40-965-Budget-of-Hong-Kong--1978-1979-1978 — Page 95

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14. Next there is the perennial problem of fees and

charges: I shall have to sound a warning that we cannot

postpone indefinitely an increase in water charges (the

Water Authority's accounts barely broke even in 1976-77,

have moved into deficit of $275 million in 1977-78) and

are forecast to be on deficit to the extent of $342 million,

$245 million and $309 million in the forecast years 1979-80

to 1981-82. And certain postal charges should be revised

straight away (inland printed papers particularly) to

eliminate aggregate losses of $22.5 million in 1976-77 and

more in 1977-78. These losses reduced the aggregate of

profits of other cost/profit centres within the Post Office

in 1976-77 from $84 million to $61.5 million.

15. Excise duty on tobacco in certain imported cigarettes

needs to be adjusted upwards for, with the introduction of

what is known as the "puffing" process, a greater number

of cigarettes can be manufactured from a given weight of

tobacco thereby depriving the Treasury of revenue and

effectively narrowing the present differential in favour

of local manufacturers (who do not use the "puffing" process).

We also have a problem of evasion in respect of diesel fuel:

kerosene is being mixed in by taxi drivers. The revenue is

suffering and much black smoke is being emitted.

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