'Budget can survive economic doubts'

PUBLISHED : Saturday, 29 November, 1997, 12:00am
UPDATED : Saturday, 29 November, 1997, 12:00am

A major business group has called on the Government to stick to its Budget aims next year despite the uncertainties caused by the financial turmoil.


In a submission to the Government published yesterday, the Hong Kong General Chamber of Commerce said only the broad parameters would need adjusting, for example, expected economic growth and revenues.


It stuck to its demand for the Government to cut profit tax to 15 per cent and give further relief to salaries tax.


The chamber suggested the $100 airport departure tax be halved and hotel accommodation tax be cut from five per cent to 2.5 per cent to boost tourism.


It also called for a review of the tax on alcohol.


'Staying with the broad budgetary programme is more likely to engender greater confidence in the local economy than any dramatic changes made in response to recent events on financial markets,' the business group said.


The chamber added that the huge reserves and the forecast surpluses over the next few years would provide the financial resources to continue its existing programmes.


'Some tax cuts and a consequent reduction in the expected surplus for the year will give a mild fiscal stimulus to the local economy,' it said.


'The chamber believes this to be the best budgetary strategy to help underpin confidence in the local economy.' Financial Secretary Sir Donald Tsang Yam-kuen has forecast a surplus of $32 billion in the current 1997-98 Budget.