TNAG-1641-FCO40-2288-Budget-of-Hong-Kong-1987 — Page 176

11.2.87

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the community as possible is not without its attractions

if the prize to be gained is a stable fiscal regime with

lower direct taxes.

49.

For the moment, however, I propose to limit the

renewed upward drift of direct taxes as a proportion of

the total tax revenue by adjustments within the existing

system.

50.

When direct tax rates were increased in 1984,

this step was taken in the light of the budgetary

situation then prevailing (14). There is now room to

review the position. But I emphasize that caution should

be our guiding principle.

51.

A number of existing indirect taxes and charges

are fixed in cash terms. These require regular review if

their yields in real terms are to be maintained. It is

tempting in the face of a surplus to leave well alone.

But I believe this would be a serious mistake because in

due course we would need large increases to recover lost

ground.

(14)

1984 Budget Speech, paragraph 128.

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