|
Hong Kong budget brings tax cuts, floats idea of GST
MEETING THE DEMAND:
The territory's financial secretary eased the burden on the middle classes, and set up studies aimed at evaluating the proposed goods and service tax
AFP, HONG KONG
Thursday, Feb 23, 2006, Page 12
|
A protester holds a bowl of meat with a sign saying ``big business group,'' left, and another of rice with a sign reading ``subsistence level'' during a protest outside the legislative chamber before Financial Secretary Henry Tang delivered his annual budget speech to lawmakers in Hong Kong yesterday.
PHOTO: AP
|
Hong Kong Financial Secretary Henry Tang (ð^¦~), going some way to meet public demand, announced yesterday modest tax breaks but balanced them with the start of consultations on a goods and services tax (GST).
In his annual budget speech, Tang said he will cut taxes by HK$1.5 billion (US$192 million) this year through a rejigging of tax bands as the territory had made a full recovery from the 1997-1998 Asian financial crisis.
The measures were aimed at removing the burden on taxpayers, particularly middle-class families, he said, adding that he would also extend mortgage tax relief at a cost of HK$1.2 billion this year and next.
He forecast a budget surplus of HK$4.1 billion in the year to next month, the first since fiscal 1998-1999, but he opposed major tax concessions given an already narrow tax base and risks ahead, among them a possible bird flu epidemic and volatility in global financial markets.
"As a government that is known for managing public finances prudently and keeping expenditure within the limits of revenues, we should not rush into deciding on substantial tax reductions," Tang said.
"I also believe that citizens should fulfil their civic responsibility by paying some tax," he said.
To widen the tax base, Tang said the government will launch a detailed public consultation later this year on the feasibility of introducing a GST.
The consultation should last nine months and Tang expects it will take three years from making a decision to introduce GST to its actual implementation.
Tang forecast a surplus of HK$5.6 billion for this year and next, rising to HK$32.6 billion in 2010-2011.
The economy expanded 7.3 percent last year following 8.6 percent in 2004, with exports of goods and services recording "remarkable" growth.
Hong Kong should achieve solid growth this year of 4-5 percent while inflation will remain moderate at about 2.3 percent.
This story has been viewed 2595 times.
|
Print
Mail
wiki links