TNAG-1727-FCO40-2440-Minutes-and-Hansards-of-the-Legislative-Council-of-Hong-Kong-1988 — Page 110

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Introduction of $ales tax

The Financial Secretary said that before introducing the sales tax and deciding on how it should be levied, extensive consultation will be conducted and expenditure pattern of the public will be taken into consideration so as to minimie the effect on the quality of their living. I agree that such step is most essential.

In fact, every citizen has to pay tax. For example, part of what we pay for electricity, means of transport, meals eter and so on, contributes to the corporate profits tax. The sum, which is minimal and comparatively worth paying, is levied in a most indirect manner without alerting the public, thus making it Two difficult to raise objection. But every year on April, the

so-called 'increase day', the charges for various items connected with people's livelihood usually have upward adjustments under the protext of in keeping with inflation. In truth, it is a means to ensure the profits of the companies. If the adjustments are higher than the wage increase in real term, protests will definitely be

provoked.

The aim of introducing sales tax is to make up for the

loss in direct tax in times of economic recession. The Government,

however, must bear in mind that the general public have to take in account of very small sum of money say a few dollars in planning their family budgets. Thus even the rate of sales tax is low, it will in one way or other affect their livelihood. Therefore, in my

that is opinion, it is only under very trying condition, e. financial restraints still exist even by reverting the rate of corporate

profits tax from 17% back to 18, should sales tax be imposed per cent

because it is an obligation for both the employers and the employees to share the budren in overcoming difficulties during

hard times.

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