SECRET
The main argument against the removal of the tax is perhaps not so much on the size of lost revenues (HK $0.6 billion in the current
fiscal year, some 2% of projected recurrent revenues), as considera- tion of the quity of the tax base. At present, besides interest withholding tax the tax range comprises income tax, payable only by a minority of salary-earners (on account of the relatively high level of allowances) at the maximum effective rate of 15%, corporation tax of 161% and a small contribution from excise and other taxes. However, the withholding tax is universally applied virtually the only tax of this kind - and although a relatively small burden notionally affects all depositors equally.
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