TNAG-1641-FCO40-2288-Budget-of-Hong-Kong-1987 — Page 53

Imported Hydrocarbon Oil

103.

of consumers,

I turn first to imported hydrocarbon oil. I am aware

that crude oil prices have increased with consequential upward

adjustments in fuel prices. I am reluctant to add to the burden

but nevertheless there is a need to maintain the

real value of the yield from this particular tax source. The duty rates on hydrocarbon oil were revised last year (35). I

propose to increase the duty rate on motor spirit from $2.30 to $2.40 a litre and on diesel oil for road vehicles from $1.15 to

$1.20 a litre (36).

104.

The refund on diesel oil to the franchised bus

companies will remain at 65¢ a litre. The cost of the duty

increase to all these companies taken together will be

$6 million. The effect, if any, on bus fares should be minimal.

105.

The two increases come into effect this afternoon. I

estimate the additional revenue yield to be $60 million in

1987-88.

Intoxicating Liquor and Imported Alcohol

106.

I make two proposals relating to intoxicating liquor. First, I propose increases varying from 6% to 13% in specific duty elements with a view to restoring their real values since

they were last revised (37). A number of them have not been

revised since 1984. The ad valorem rates will remain unchanged.

(35) 1986 Budget Speech, paragraph 99.

(36) If the full increase is passed on to consumers, petrol prices will rise

by about 2% and diesel prices by about 1.5%.

(37) Appendix E.

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/107. Second