PRESS RELEASE

Transcript of remarks by FS on GST

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Following is the transcript of remarks (English portion) by the Financial Secretary, Mr Henry Tang, at a media session at the West Wing lobby, Central Government Offices, after a meeting of the Committee on Economic Development and Economic Cooperation with the Mainland of the Commission on Strategic Development this afternoon (August 21):

Reporter: ... why are you insisting on the need for GST ... Once the tax is implemented, it will be there ...?

Financial Secretary: Regarding the need for broadening the tax base, I am very pleased to see that in a meeting we just finished, most of the members agreed it was necessary to broaden our tax base and that a GST was something we could positively consider. There were members who raised a concern that once you had the mechanism in place, what was there to prevent future governments from increasing it. Of course, I am sure that if we were to be able to pass such a mechanism that there would be a check and balance, through legislative process or otherwise. So it is something we are quite open-minded on and are prepared to discuss if necessary.

Reporter: How would you deal with the opposition ...?

Financial Secretary: I think our experience is actually not different from most of the other ones who we have studied. In the past two decades, the economies which have introduced GST basically faced the same kind of opposition when it was first introduced or first launched. So I don't think Hong Kong is any different. Over the course of time the population tend to come around and start to understand some of the more complex and fundamental questions we are posing to the community. These difficult questions are not going to go away by themselves. We cannot sweep them under the carpet and we should not sweep it under the carpet. So that's why I am hoping we are able to discuss these problems in a constructive and rational manner.

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

Ends/Monday, August 21, 2006
Issued at HKT 19:01

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