The Democratic Party said yesterday it would oppose a cut in tax allowances as such a move would further hurt the economy.
The comment follows reports that Financial Secretary Donald Tsang Yam-kuen will announce in his fourth Budget on March 3 that the level of allowances, including the basic allowance, will not be raised.
In last year's Budget, the basic allowance - the amount that can be earned before tax is charged - was $108,000, an eight per cent rise compared to the previous year.
Democrat legislator Lee Wing-tat said a freeze was understandable because the level had previously been adjusted according to the inflation figure, which had been close to zero in recent months.
'However, a cut in the level will send a very bad signal to the public that the Government is not optimistic the economy will recover very soon.
'People will be reluctant to consume and this will have a dampening effect on the economy.' He said private consumption constituted about 60 per cent of gross domestic product.