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Transcript of remarks by FS on GST

Following is a transcript of the remarks (English portion) by the Financial Secretary, Mr Henry Tang, at a stand-up media session at the Legislative Council Building tonight (October 19):

Reporter:¡@How do you feel about this motion and what is the next step?

Financial Secretary: We are disappointed at the outcome. Actually the biggest difference between the Government and the Hon Yeung Sum¡¦s motion is that the actual effect of the motion will suffocate further discussion on broadening the tax base and a Goods and Services Tax. I hope in this incident, that LegCo members have not misjudged public sentiment nor have they lost a valuable chance to discuss a very important subject in the community. Actually, there was a lot of discussion today regarding various different types of taxes. New taxes for example capital gain tax, progressive tax or dividend tax and indeed they have raised a number of questions as well as concern about the GST. This is exactly why we should continue this discussion and we should continue to consult. One of the most talked-about subjects is income disparity that GST might bring. I think this is a very superficial argument and indeed it maybe intentionally misguided. Because when we launched the GST debate, together we have a large basket of other compensation and measures to mitigate the effect on lower income families. The income disparity issue is something that the Government must address and we will address in any future tax system. We will not launch any tax system that is not fair and that would not address this income disparity issue.

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

Ends/Thursday, October 19, 2006
Issued at HKT 23:42