HK Considers Maintaining Low, Simple Tax Regime: Leung

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Last updated at: (Beijing Time) Tuesday, January 28, 2003

HK Considers Maintaining Low, Simple Tax Regime: Leung

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Any measures that might be taken to tackle Hong Kong's deficit would be on the basis of maintaininga low and simple tax regime without sales tax, Hong Kong's Financial Secretary Antony Leung said here Monday.

Speaking at a Foreign Correspondents' Club (FCC) luncheon, Leung noted that to ensure a stable and sustainable economy, Hong Kong has to resolutely tackle the budget deficit which occupies over 5 percent of Hong Kong's GDP.

"If we can't demonstrate our ability to address the problem within a reasonable period of time, our credit rating and even ourcurrency would be under pressure, as foreign experiences have repeatedly demonstrated," the financial secretary said.

Leung said that targets have been set to reduce projected government spending by 20 billion HK dollars (2.56 billion US dollars) by 2006-07, which will involve sacrifice from a wide cross-section of the community.

The government is facing other tasks in the next few months, including reviving the economy, and implementing Article 23 of the Basic Law, according to the financial secretary.

The government's housing policy outlined in last November is anexample of a proactive move to help the market function more efficiently, Leung said, adding that cutting government expenditure, trimming the size of the civil service, eliminating red tape and over-regulation, and sourcing services are other proactive decisions that will allow the market to play a greater role in the economy.

He said that Hong Kong's economy is actually recovering, especially the export sectors.

Looking at the broader picture will "help reassure ourselves that the economic future of Hong Kong does hold enormous promise,"Antony Leung said.

On Article 23 of the Basic Law, the financial secretary noted that the question becomes how to implement the article in a way to protect national security and fulfill the constitutional obligation, and, ensure the protection of the fundamental rights and freedoms of the people, which are founding pillars of Hong Kong's free society and vibrant economy.

Leung said the implementation of Article 23 will not undermine the existing rights and freedoms enshrined in the Basic Law and enjoyed by people in Hong Kong.

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