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Lawmakers fail to resolve split over border tax

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Lawmakers remain divided over the proposed land departure tax, which officials claim is crucial to public finances.

The Democrats and the DAB joined forces to reject the proposed levy while the Liberal Party and the Progressive Alliance gave cautious support for the unpopular proposal to be explored further.

A motion rejecting the levy and a middle-of-the-road amendment were both vetoed after a four-hour debate last night.

Moving the motion, Lau Kong-wah of the Democratic Alliance for the Betterment of Hong Kong warned a departure tax would imply the SAR and China were 'two countries'.

He said it would also go against Tung Chee-hwa's policy of bolstering development with the Pearl River Delta. The Government, said Mr Lau, should boost the economy by stimulating domestic consumption rather than raising revenue with a new levy.

Democratic Party vice-chairman Dr Yeung Sum criticised the Government for committing billions of dollars to the Disneyland project while taxing the public to boost its coffers.

But Secretary for the Treasury Denise Yue Chung-yee maintained that the tax could widen the narrowing tax base and turn the deficit into the black in the medium term.

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