Hong Kong Government Mulls Sales Tax Proposal
According to local press reports, the government of Hong Kong is said to be
considering the feasibility of a sales tax as it grapples with the problem of
lower tax revenues in the next couple of years in the aftermath of the SARS
crisis. The South China Morning Post has revealed that sources close to the government
believe the new Financial Secretary, Henry Tang, is preparing to lay the foundations
for a sales tax, though such a move has yet to be announced as official government
policy. However, although the Tung administration is very wary of the budget deficit
situation, with the shortfall projected to reach almost HK$70 billion this year, the source told the
SCMP that the government is expecting an improved economic environment as deflation
slows, the property slide stabilises and exports increase. .
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