Hong Kong shelves controversial sales tax plan
Posted: 05 December 2006 1501 hrs
HONG KONG : Hong Kong is to drop plans to introduce a goods and
services tax (GST) after it failed to win enough public support for
a change in the city's famously low tax environment.
Financial Secretary Henry Tang said the decision was reached after
an ongoing public consultation showed that the controversial plan
lacked public support.
"It is clear from the views collected that we have not been able to
convince the majority to accept GST as the main option to address
the tax base problem," he said.
"So we accepted that at this time we do not have the public support
nor the conditions for introducing a GST. For the remainder part of
the consultation we will not be advocating GST as the only option,"
he told reporters.
Tang did not take questions nor clarify whether the government will
re-consider the policy in the future.
He said the government will stop promoting the plan over the
remainder of the nine-month consultation period and urged citizens
to continue to provide their views on the other possible ways to
widen the tax base.
Hong Kong leader Donald Tsang said the decision has complete
support from him and the Executive Council, or cabinet.
"We believe that the decision (Tang) has made respects fully the
wishes of Hong Kong people that we should seriously consider
widening our tax base," he said.
"At the same time he has paid full regard to the strong opposition
of the people to the introduction of GST at this time," he
said.
Tsang Yok-sing, Executive Councillor and the founding chairman of
the pro-Beijing Democratic Alliance for the Betterment of Hong Kong
(DAB), also welcomed the move.
"We opposed the GST but also believe that we should find other ways
to widen the tax base ... we welcome that the government has
listened to the public views," he said.
The proposal has met public hostility with protests denouncing the
plan throughout the consultation period. All major political
parties opposed the measure.
Activists had accused Tang of robbing the poor to pay the rich,
with protesters saying a sales tax would decimate the booming
tourism industry by making shopping in Hong Kong - one of its
biggest draws - less attractive. - AFP/ch
