HK financial secretary says tax reform necessary

Hong Kong Financial Secretary Henry Tang said Monday that tax reform is necessary as the existing system relies too much on non-recurrent revenue.

Speaking on a radio talk show Monday morning, Tang said the government is studying the introduction of a goods and services tax (GST), with an aim to arouse discussion on the issue.

He said that the introduction of a GST is a controversial issue and objection is expected.

However, he added that the government cannot be evasive about the topic and should lead the public in looking into the problem and understanding the need to widen the tax base.

Tang said a GST would not be introduced until 2009 at the earliest even if the community reached a consensus in the public consultation.

He expected the consultation to take a year and the legislation and preparations would take at least another three years.

If a GST is implemented, the government will also introduce measures to ease the financial burden on low-income families, Tang stressed.

Source: Xinhua