THE Financial Secretary, Donald Tsang Yam-kuen, has once again proved you can never please all of the people, even some of the time. Nearly everyone in Hong Kong will pay no or less salaries tax under the new Budget. But many readers will not be among the lucky ones. Arthur Andersen & Company tax partner, Marcellus Wong Yui-keung, said: 'If 96 per cent of people benefit from this Budget, then 4 per cent will not. A large proportion of the expatriate community falls in that 4 per cent.' Salaries-tax bands have been widened, rates flattened and allowances raised. The lowest marginal rate of 2 per cent now applies to the first $30,000 of chargeable income, up from $20,000. And allowances increase by a minimum of 10.2 per cent, for the first and second child, and to as much as 66.7 per cent, for a single parent. A typical family earning $312,000 annually - and consisting of a married couple with two children - will enjoy a 68 per cent drop in tax. Meanwhile, a family at the median income level of $204,000 - this time, a married couple with no children - will get an 89 per cent tax saving. But Hong Kong's expatriate community would see few benefits, Ernst & Young tax partner John Reid said. Accounting for only 2 per cent of a population of which only 50 per cent paid any salaries tax, expats tended to fall into the higher income brackets and so would not see any income-tax relief. Nevertheless, Mr Wong looked on the bright side. 'But they [expats] drink more wine than the Chinese. The drop in tax on wine is the only thing they have to celebrate,' he said. Messrs Wong and Reid, like many others, criticised the Financial Secretary's decision not to reduce tax collections, a choice expected to cause the Government's surplus to balloon to $31.7 billion next fiscal year. Total reserves would hit $330 billion by the handover, but Mr Tsang warned that ambitious rail-development projects could consume an estimated $50 billion of that. Mr Reid said: 'I am not at all convinced by the reasons for not giving back in the area of tax. 'The truth of the matter is that the economic situation could hardly be better. How favourable do circumstances have to be? Do we collect tax to meet Government expenditure or for the sake of collecting tax?' Mr Wong also complained that the increases in the basic allowances were too small, only 11.1 per cent this year compared with nearly 14 per cent last. 'I can understand why they kept that surplus. There is talk of the massive rail projects. But if you look at this, it doesn't make sense. 'These are commercial ventures which could get funding from the private sector. 'I think Mr Tsang was concerned future revenue might not be guaranteed. A large amount of the surplus comes from land sales, which might not bring a guaranteed revenue in the future,' he said. Others welcomed the changes. KPMG Peat Marwick tax manager Darren Koh said it was unrealistic to expect a cut in the tax rate, which was already one of the lowest salaries-tax rates in the region. 'People might be concerned when they see the surplus, which is going beyond astronomical. [But] there are other, political reasons,' he said. 'What Mr Tsang has done is to keep it steady and turn over a huge budget surplus to the SAR [Special Administrative Region], and he has done something to help the masses. What else do you want?'