Tang Dampens Expectations Ahead Of 2007/8 Hong Kong Budget

by Mary Swire, Tax-News.com, Hong Kong

03 January 2007

Hong Kong Financial Secretary Henry Tang says he understands people have high expectations for the 2007-08 Budget, but argues that a balance must be struck between different parties' interests when devising it.

Speaking on a radio talk show yesterday, Tang said that although Hong Kong's recent economic development is good, the city should keep a clear mind in facing future challenges.

The Financial Secretary said that the 2007-08 Budget will be based on the principle of prudent management of public finances and will provide flexibility for the government of the next term.

In response to requests for reverting the salary tax to the 2002-03 level, Tang said the four elements which determine the tax, including allowances, the level of tax rates and the standard rate, have been changed since 2002-03.

"Even if there is room for adjustment, we believe that there is no need to change all the four elements simultaneously," he stated.

When asked whether owners of unleased property could be exempted from paying rates, the Financial Secretary said he would consider the suggestion.

On wine tax, Tang said his personal interest will not interfere with his decision in devising budgetary policies. He will consider three elements when making the decision, including whether the measure will create job opportunities, promote Hong Kong's economy and enhance the development of tourism, and the exhibition and conference industries.

When asked whether other cities in mainland China will replace Hong Kong's role as a financial centre, Tang said the Mainland should be able to have more than one such centre, but noted that Hong Kong and other Mainland cities are at different development stages and could support each other and create a win-win situation.

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