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46.
But one way of achieving a broader tax base is
through widening the scope of indirect taxes, which we
currently limit to a relatively small number of specific
items. Members of this Council may recollect that my
predecessor said last year that a broadly based indirect
tax was a theoretical possibility (13). Of course, there
are other options for broadening the tax base; for
example, an eventual widening of the salaries tax net.
47.
If we were to move in the direction of a more
broadly based indirect tax, possibly in place of some of
our existing taxes, we would have to think the package
through with meticulous attention to the consequences that
might follow. A package that had a markedly adverse
effect on the cost of living and was moreover expensive
and difficult to administer would not be right for Hong
Kong.
48.
I do no more this afternoon than raise this
matter for debate. I have as yet taken no hard and fast
stand. I hope that I shall hear Members' views on the
principles, if not the mechanics. It does seem to me that
a modest contribution from as broadly based a sector of
(13)
1986 Budget Speech, paragraph 18.
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