TNAG-1728-FCO40-2441-Minutes-and-Hansards-of-the-Legislative-Council-of-Hong-Kong-1988 — Page 222

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been mentioned last year and emphasized that the proposed tax which aimed at a wider and more stable tax base would be given careful consideration to ensure that it meets the three basic criteria', I still want to register my strong reservation on this idea. The following are my reasons

:

Firstly, sales tax would be a burden to all, irrespective of their financial status.

per cent

As a matter of fact, the rich would not mind a 5 or an even higher sales tax as they are As for the poor whose purchasing too affluent to care about it. power has always been low, their contribution towards the public

#t # coffer through sales tax would be minimal. Nonetheless, such kind As for the of indirect tax may put another straw to their burden.

sandwich class, the majority of them have always had the feeling that their tax burden, as far as direct taxes are concerned, is

They are the already heavier than that of the well-off class. group that has the greatest anticipation for tax concession. have just begun to share the fruits of Hong Kong's economic success in the last few years and are now capable of raising their living standard a little or planning to have a flat of their own

The introduction of through cutting family spending to the bone. sales tax is bound to have greater effect on them and would probably deal a heavy blow to them phychologically and materially. We must note that they are the backbone of our society would be most undesirable to upset them at this time. moment.

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Secondly, there have long been ups and downs in our economy. As our Financial Secretary pointed out in paragraph 4 of his Budget speech, the economy of Hong Kong is characterised by its cyclical nature and undergoes a period of lower growth rate after

However, our past every interval of a few prosperous years. experience has rendered us sufficient assurance that each of our economic ebbs would last no longer than to A years and that our resilience is always very strong.

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I can therefore see no

compelling reason to justify the need to discuss at this time the introduction of a completely new tax which was unheard of in the

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