Tang Seeks To Stimulate Debate On Sales Tax
by Mary Swire, Tax-News.com, Hong Kong
23 November 2004

Hong Kong's Financial Secretary, Henry Tang argued yesterday that the SAR cannot shirk the issue of tax reform, and suggested that whilst the introduction of new taxes may be painful, they are necessary to widen the tax base.

Speaking on a local radio programme on Monday, Mr Tang acknowledged that objections to the idea of a sales tax were expected from the public, but stated that the government has a duty to initiate a debate on the issue.

“I think it is important that I introduce this subject for a general, constructive and healthy discussion simply because it will have overriding and crucial importance for our future generations,” Tang told a press briefing after his radio appearance.

He confirmed a previous announcement that the sales tax was unlikely to be introduced before 2009, and only then after an extensive public consultation exercise, and added that the drafting of legislation and preparations for the new levy would then take at least three years.

The Financial Secretary also stressed that measures will be put in place to ensure that low income families will not be hurt by the tax, whilst deductions will be put in place for middle income earners.

“As far as the middle- income earners are concerned, I think a straightforward tax concession will be the best way forward,” Mr Tang explained.

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