ENG-2006 — Page 93

The Economy | 65

Public Consultation on Tax Reform

In mid-July 2006, the Government launched a public consultation on how it should reform the tax system. In the consultation document, the Government explained in detail why it needed to broaden the tax base. In addition, the document sought to consult the public on whether the introduction of a Goods and Services Tax (GST) was an appropriate option to broaden the tax base. The Government conducted an interim review of the public consultation in December 2006. The community generally agreed that the Government should stabilise its revenue by broadening the tax base for the purpose of ensuring the health of its public finances and maintaining Hong Kong's competitiveness. Although the community could not reach a consensus on the introduction of a GST, it supported the Government in continuing discussions with the public on other options to broaden the tax base. The Government will prepare a report after the conclusion of the consultation period at the end of March 2007 and submit it for consideration by the Government of the next term.

Government Procurement and Supplies Management

Hong Kong, China is a signatory to the World Trade Organisation Agreement on Government Procurement (WTO GPA). Government procurement is undertaken in accordance with the principles of openness, transparency, fairness, public accountability, value for money and non-discrimination. Public tender procedures are widely used for general items. Restricted or single tender procedures are used where open competitive tendering would not be an effective means, such as in cases. involving compatibility with existing equipment, or patented or proprietary items. For complex and critical purchases, prequalification exercises may be conducted before tendering to ensure that suppliers are financially and technically competent and reliable.

Purchases of goods and related services with values above predetermined thresholds are undertaken by the Government Logistics Department (GLD). These goods and related services are normally obtained through competitive tendering, without preference to any particular source of supply, to ensure that user departments' needs are met at the best possible price, having regard to life-time cost and reliability of supply. GLD helps user departments to get the best-value purchases. Special consideration is given to environmentally friendly products where available and appropriate.

To facilitate sourcing and market research, GLD maintains and regularly updates the Supplier Lists which comprise local and overseas suppliers for different categories of commodities and services.

Notices for public and prequalification tenders are published in the Government Gazette and local newspapers. Suppliers on the relevant Supplier Lists and, in case of procurements covered by WTO GPA, consulates and overseas trade commissions are also informed. To allow easy access by overseas suppliers, GLD also puts its tender notices and related information on the Internet. Under the Electronic Tendering