TNAG-1361-FCO40-1807-Hong-Kong-Hansard-reports-and-minutes-of-the-meetings-of-the-1985 — Page 53

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My first proposal today is to impose a tax on advertising

expenditure.

Advertisement, as we know, does not increase the real

value of the products it represents. It creates only impressions. Since the question of whether advertisement and expenditure on it were useful to society at all is highly controversial, I shall not build my proposal on this argument. Nevertheless, society will not suffer, nor the general standard of living be lowered, if advertisement expenditure is reduced as a

result of the proposed tax.

One needs no reminder to the fact that our TVs,

newspapers and magazines are inundated with advertisements on such items as cigarettes, cars, alcoholic drinks and cosmetics, etc. Although there is no official statistics on the total annual expenditure on advertising in Hong Kong, I think the revenue potential of the proposal is huge. The Census and Statistics Department recorded a total turnover of $2,600 million for the public relations, market research and advertising trade as a whole in 1982. Even assuming that half of the expenditure is for advertising purposes, and with an annual growth rate of around 25% which a university researcher has discovered recently, the total estimated expenditure on advertising is $2,000 million in 1984. It should be noted that since advertising expenditure will generally grow with consumption, tax revenue will grow with

further increases in our GDP.

A bonus which may accompany this proposal is that if advertisement is reduced as a result of the proposed tax, the selling cost of the commodities, for example soft drinks, could be lowered towards helping to off-set the proposed tax.

Concomitant with my proposal for taxing advertisement, I would also like to suggest that Government gives serious consideration to taxing the use of air space over roads by advertising signs protruding from buildings. Such a proposal