PRESS RELEASE

(Source : Government Information Centre)

FS speaks on goods and services tax

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Following is the transcript of remarks (English portion) by the Financial Secretary, Mr Henry Tang, at a media session after attending a RTHK radio programme this (November 22) morning:

Reporter: Mr Tang, could you explain why a Goods and Services Tax will not be introduced until at least 2009? Is it because the government wants to avoid possible strong opposition from legislators? And secondly, can you also explain what kind of tax concessions can be expected from the poor?

Financial Secretary: First of all, there is already strong opposition from the legislators even without any substantive part of the Goods and Services Tax having been announced. I think the likelihood of it being passed in the present moment without any substantive discussion will be very limited. But 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. I believe it is my responsibility to introduce this issue for public discussion.

Reporter: What kind of tax concessions could be expected for lower income families?

Financial Secretary: It is very important that this tax addresses the various challenges faced by different sectors of our society, especially for the low-income families. We must devise a package of compensation that will mitigate the effect of the Goods and Services Tax on them so that it will not add to their difficulties. As far as the middle- income earners are concerned, I think a straight forward tax concession will be the best way forward. But we will be introducing a substantive issue for discussion when it is time to consult the public. There will definitely be a very long, in-depth and comprehensive consultation.

(Please also refer to the Chinese portion of the transcript)

Ends/Monday, November 22, 2004

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