levies, will require adjustment if real yields are not to diminish because of inflation. I am proposing a 10% increase in the duties on tobacco, hydrocarbon oils, alcoholic beverages and alcohol. Details of the new rates for these duties are set out in the Supplement to this Speech. The additional revenue yield is included in the estimated recurrent revenue forecast for 1992-93 in the Medium Range Forecast (which assumes that revenue from all sources will increase broadly in line with trend inflation).
94. I do not intend this afternoon to propose any increases in such government utility charges as water and postal charges, tunnel tolls and airport and ferry fees. We will need to consider appropriate increases to these charges during the course of this year. But the timing will be carefully phased, so that they are not bunched together and the impact on consumers can be minimised. Similar adjustments may be needed to tax- loaded fees, such as vehicle licence and company registration fees. Again, the timing of any changes will be looked at carefully.
95.
Finally, Members are aware that the moratorium on government departmental fees expired on 29 February. The vast majority of these routine fees are designed to do no more than recover costs and have no impact on the Consumer Price Indices. Nevertheless, they were frozen temporarily to help break the cycle of inflationary expectation. The intended effect has been largely achieved, and routine consideration of adjustments to these fees will now resume. But any changes will be phased in gradually.
Tax Concessions
96. I turn now to tax concessions. I have had two main aims: first, to reduce or abolish taxes on certain non-luxury items which directly affect the cost of living of ordinary families; and, secondly, to ease the burden on those liable to salaries tax.
Salaries Tax
97. Last year, tax bands were simplified to benefit taxpayers with lower incomes. At the same time, personal allowances for single persons and married couples were increased. Nevertheless, there has been some criticism that the value of personal allowances has not kept pace with inflation. In assessing these criticisms, it is worth remembering that well over half of the working population of Hong Kong in fact pays no salaries tax at all; and of those who do, only 100,000 pay tax at the standard rate.
98. I have considerable sympathy with the general aim of maintaining the value of personal allowances, although this cannot be done automatically, on an annual basis, because of the need to consider detailed fiscal and economic circumstances year by year. This year, however, I am able to propose across-the-board increases in personal allowances. These will not only provide relief to taxpayers but will also result in a significant number of taxpayers dropping out of the tax net altogether.
99.
I propose to increase the aggregate single and married person's allowances by over 12%, from $41,000 and $82,000 to $46,000 and $92,000 respectively. In addition, I propose increases ranging between 11% and 15% in the allowances for the first child, second child, dependent parent and single parent.
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