Plans to scrap generous tax breaks on company cars could undermine the taxation system and distort economic decision-making, the Taxation Institute of Hong Kong says. Vice-president Marcellus Wong called on the Government to quash the move and recommended it focus on other measures, such as electronic road pricing. The institute, in a letter to the Legislative Council, warned the proposed changes were unlikely to reduce car useage or ease road congestion. 'The Government has often prided itself on the simplicity of Hong Kong's tax system and this simplicity has indeed been critical in making Hong Kong one of the most competitive places in the world. Hong Kong should treasure its simple and efficient system,' Mr Wong said. Under the proposals, the deduction of expenses in connection with the purchase, financing, leasing, maintenance, operation and use of private cars from the employer's tax liability will be stopped. Companies now qualify for deductions of more than 70 per cent of the cost of buying the car. Staff given an equivalent cash sum to buy a car would be subject to salaries tax of 15 per cent on the lump sum.