TNAG-1728-FCO40-2441-Minutes-and-Hansards-of-the-Legislative-Council-of-Hong-Kong-1988 — Page 167

FCO40 Hong Kong Department Records 聯邦事務部香港部檔案 All

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admittedly the figure may be revised upwards in view of the new and I would urge the. considerable and generous concession, in 1988-89.

Financial Secretary to make a commitment to introduce separate taxation

soon as possible in his reply.

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I shall now come to the highly controversial subject of a broadly based indirect taxation, possibly in the form of sales tax at the wholesale level. It is really recognised that our tax base is extremely small.

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It is estimated that maybe only about 100,000 people in Hong Kong our #

•per of a working population of 2.7 million pays more than 65% of all direct

taxes

تکوین

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The proportion of direct tax

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taxation whereas Government has to finance massive and increasing education, medical, social and capital programmes in view of ever growing demand and public aspirations.

twhere

to indirect tax is 60 40 at present. Since many people are enjoying the stability, prosperity and improvement of the environment of Hong Kong are not paying any direct taxes, some forms of indirect taxes may be

down-turn considered, especially in the event of business, turn-down when direct

basi taxes in such narrow ways can no longer be relied upon to finance our future budgets. However, my own feeling is that to have a plan along

for the such lines where rainy days should be considered, but I see no need or

that justification to implement it at once if our forecast can be met, We will continue to have surpluses of over $2 billion through 1990

There is already a polarisation according to medium range forecast.

that of (rich and poor in Hong Kong. I am afraid it is easier said than done to have with the greatest respect a new indirect tax which would

ཞ་ལ་ཚང་བ་ wield at a produce a stable and worthwhile revenue and low tax rate, cause

low tax rate cause minimal atet distortion to the Colony (and should be simple and cheap to administer.

have it

that

economy

To be accepted by the public is even more difficult.

said: to

Edmund Burke once

to tax and to please, no more than to love and be wise is not

}

Though

that

given to man. Therefate, I agree/we

agree we should consider it as a contingent plan, I would, however, ask for extreme caution for its introduction while we have substantial surpluses. Four-direct taxes-are-low-by

•Though world standards, so such line of thought such as the trend in other.

it is countries is to reduce direct taxes and increase indirect taxes, which mostly a

Our direct taxes are low by world standards so

Such argumenty can hardly be accepted by the

line

is merely azero sum game.

of thought

cap.

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